Epidemic disease and financial development

Jiafu AN, Wenxuan HOU, Chen LIN*

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review

9 Citations (Scopus)


We study the impact of an epidemic disease on modern financial development by exploiting geographic variations in the precolonial survival conditions of the TseTse fly, which transmits an epidemic disease that is harmful to humans and fatal to livestock in Africa. Using newly georeferenced data, we discover that firms and households in regions historically more exposed to the epidemic disease have less access to external financing today. Exploring the channels, we find that people in historically infested regions are less likely to trust others and financial institutions, to share credit information and to learn and adopt new financial technologies.

Original languageEnglish
Pages (from-to)332-358
Number of pages27
JournalJournal of Financial Economics
Issue number1
Publication statusPublished - Jan 2022
Externally publishedYes

Bibliographical note

We thank the Editor (Bill Schwert) and an anonymous referee for their very helpful and constructive comments. We owe thanks to Jo Danbolt, William Goetzmann, Lamar Pierce, Daniel Wolfenzon and the conference participants at the American Economic Association Annual Meeting 2018, the Financial Management Association Annual Meeting 2018, the European Financial Management Association Annual Meeting 2018, the China International Conference in Finance 2017 and the Association for the Study of Religion, Economics, and Culture European Conference 2017 for their helpful suggestions. Lin acknowledges the financial support by a grant from the Research Grant Council of the Hong Kong Special Administrative Region, China (Project No. T35/710/20R).


  • Disease
  • External financing
  • Financial development
  • Technology adoption
  • Trust


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