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Gilles Hilary — Georgetown — Brown Bag Series
6 March 2020 @ 1:30 pm - 2:30 pm
We investigate the effect of mortality salience, a leading theory in social psychology, on self-segregation. We do this in the context of executive movements, a setting that allows us to control for many confounding effects. Using the 9/11 terrorist attacks as a shock, we establish that firms located in areas with a more visible Muslim presence experienced significantly higher executive turnovers afterward. These individuals were more likely to relocate to areas with a less visible Muslim population. Several cross-sectional partitions based on the American socioeconomic fabric further validate our theoretical approach and provide a useful starting point for policy making.
In contrast to many prior studies that focus on segregation (i.e., one group excluding another), ours focuses on self-segregation (i.e., one group distancing itself from another). The importance of self-segregation is currently being debated among scholars and practitioners and has broad economic and social implications. Our choice of the 9/11 shock allows us to identify the sources of self-segregation unequivocally, but we believe it is representative of broader phenomena that are generally hard to characterize empirically. Our results also contribute to behavioral economics research. While this field has gained popularity over the years, it has largely focused on standard heuristics. The breadth of psychological theories has not permeated economic research. We take steps to remediate this issue by using a well-established theory in social psychology to investigate an important economic and social question.