Political Borders and Bank Lending in Post-Crisis America
Andrew Rose and
Matthieu Chavaz
No 11595, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We use spatial discontinuities associated with congressional district borders to identify the effect of political influences on American banks’ lending. We show that recipients of the 2008 public capital injection program (TARP) increased mortgage and small business lending by 23% to 60% more in areas located inside their home-representative’s district than elsewhere. The impact is stronger if the representative supported the TARP in Congress, was subsequently re-elected, and received more political contributions from the financial industry. Together, these results suggest that political considerations influence credit allocation in a politically mature system like the United States without the formal possibility of political interference in lending decisions, and that this influence is larger if the flows between banks and politicians are reciprocal.
Keywords: Empirical; Data; Panel; Fixed; Effect; County; District; Congress; Policy; Mortgage (search for similar items in EconPapers)
JEL-codes: F36 G28 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://cepr.org/publications/DP11595 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Journal Article: Political Borders and Bank Lending in Post-Crisis America (2019) 
Working Paper: Political borders and bank lending in post-crisis America (2016) 
Working Paper: Political Borders and Bank Lending in Post-Crisis America (2016) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11595
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11595
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().