Browsing by Author "Bento, Asia I"

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    Displaced Opportunities:The Differential Impacts of Bank Branch Openings in Racially Segregated Neighborhoods
    (2022-07-01) Bento, Asia I; Brown, Tony N.
    This dissertation project investigates whether bank branches increase economic disadvantage when they locate and lend in black segregated neighborhoods. On the one hand, scholars and policymakers advocate for banks to locate and lend in black segregated neighborhoods to improve economic outcomes and redress histories of black economic exploitation and exclusion. On the other hand, the long arm of institutional discrimination formalized lending practices undermining economic outcomes in black segregated neighborhoods historically, transforming them into places where lenders profit from extraction and exploitation. Although it is clear extraction and exploitation occur in black segregated neighborhoods, it is unclear whether banks locating and lending contribute to these practices. To address this debate, this dissertation project analyzes national data from the American Community Survey (ACS), the Financial Deposit Insurance Corporation (FDIC) Summary of Deposits (SODs), and the Home Mortgage Disclosure Act to investigate the relationship between bank branch openings, residential racial segregation, credit flows, and neighborhood economic disadvantage. It addresses the debate through three distinct but cross-cutting chapters. Chapter One investigates whether bank branches associate with increases in mortgage originations and decreases in subprime mortgage loans when they locate and lend in white and black segregated neighborhoods. Drawing on theoretical concepts related to financial inclusion and predatory inclusion, I address whether tiered credit markets persist across white and black segregated neighborhoods after a bank branch opens. I find bank branches associate with increases in mortgage originations in white and black segregated neighborhoods. However, they also predict increases in subprime mortgage loans in black segregated neighborhoods. These results suggest bank branches may not dismantle a tiered credit market, but could further embed neighborhoods into this unequal market. Implications for bank branches’ varied impacts across space and time are discussed. Chapter Two investigates whether bank branch openings from 2000 to 2012 dismantle tiered credit markets undercutting homeownership for wealth in black segregated neighborhoods. In theory, bank branches should usher in opportunities to accumulate wealth through home equity. I find bank branch openings associate not at all and negatively with homeownership rates and median home values in black segregated neighborhoods. Overall, median home values follow the time period’s volatile trend. They rapidly increase and decrease in banked and unbanked black segregated neighborhoods. Yet, those changes occur faster in banked black segregated neighborhoods, relative to unbanked ones. Banks associate with short-term profits for lenders during the housing boom. But they also associate with diminishing home equity for black homeowners when the housing market crashes. Findings imply bank branch openings do not create opportunities to accumulate wealth through housing in black segregated neighborhoods. Instead, they associate with the erasure of such opportunities. Thus, financial inclusion does not disentangle race, place, and risk. Instead, unequal credit markets endure offering additional evidence good credit is white credit. Chapter Three examines the effectiveness of black-owned banks during the subprime lending boom. Presumably, black-owned banks challenge black exploitation and exclusion through lending practices investing into black neighborhoods. Specifically, my analyses examine whether black-owned banks overcome the exclusionary economic structures they are embedded within during the subprime lending boom. Drawing on dialectical theoretical concepts cultural assets and structural deficits, I ask whether black-owned banks associate with access to mortgage credit at the subprime lending boom’s peak in 2006. Findings are mixed. Black-owned banks do not significantly associate with mortgage originations, but they do associate with decreased subprime mortgage loans. Thus, black-owned banks appear to protect black wealth, at least during the subprime lending boom. Implications for the utility of black-owned banks alongside other black institutions are discussed. There are three broad takeaways from this dissertation project. First, banks do not appear to erode tiered credit markets. Instead, they act as conduits to high-cost credit during certain periods. Second, as conduits to high-cost credit banks do not ease access to resources for wealth accumulation in black segregated neighborhoods, but erect additional barriers to those resources Third, black-owned banks associate with protective benefits. Yet, structural inequalities undercut these protective benefits as well as a black-owned bank’s sustainability and reach. Ultimately, this dissertation project interrogates the utility of banks and credit for economic advantage to reveal how legacies of discrimination undermine banking and credit as solutions to enduring neighborhood, racial, and economic inequalities.
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    When and Where Residential Racial Segregation Matters for Black Self-Employment
    (2019-04-17) Bento, Asia I; Brown , Tony N
    Scholars debate whether residential racial segregation associates positively, negatively, or at all with the black self-employment rate in the United States. This study engages that debate using data from the Integrated Public Use Microdata Series (IPUMS) 1980 5 percent State Sample and the 2006-2010 American Community Survey (ACS) five-year sample. Specifically, I investigate the county-level association between residential racial segregation and the black self-employment rate in 1980 and 2010. Three indices measure residential racial segregation: (1) black-white dissimilarity, (2) black-white isolation, and (3) black clustering. The number of unincorporated black self-employees divided by the number of employed black adults (i.e., 16 years old and older) captures the black self-employment rate. Using fractional logit models and net of control variables, I find that residential racial segregation does not predict the black self-employment rate in 1980, but positively predicts it in the South by 2010.