The Great Recession, which was preceded by the Financial Crisis, resulted in higher unemployment and income inequality. We propose a simple model where firms producing varieties face labor-market frictions and credit constraints. In the model, tighter credit leads to lower output, a lower number...

We exploit the staggered nature of interstate banking and branching deregulation of the U.S. to examine the causal impact of bank competition on corporate socially responsible (CSR) activities. We find strong and robust evidence that bank deregulation significantly and negatively affects the CSR...

Pledging collateral to secure loans is a prominent feature in financing contracts around the world. Existing theories disagree on why borrowers pledge collateral. It is even more challenging to understand why in some countries collateral coverage exceeds, e.g., 300% of the value of a loan. This...

Open banking facilitates data sharing consented by customers who generate the data, with a regulatory goal of promoting competition between traditional banks and challenger fintech entrants. We study lending market competition when sharing banks' customer data enables better borrower screening...

We offer a theoretical framework to analyze corporate lending when loan officers must be incentivized to prospect for loans and to transmit the soft information they obtain in that process. We explore how this multi-task agency problem shapes loan officers' compensation, banks' use of soft...

Do policies that promote credit access have an impact on targeted borrowers? To address this question, we develop a theoretical model of information production, regulation and bank competition and test its predictions using the Community Reinvestment Act's small businesses lending program. The...

We offer a theoretical framework to analyze corporate lending when loan officers must be incentivized to prospect for loans and to transmit the soft information they obtain in that process. We explore how this multi-task agency problem shapes loan officers' compensation, banks' use of soft...

This paper studies the relationship between competition measures at the bank level and the price of credit for non-financial firms in Mexico during 2009-2016. Two indicators of competition are constructed: the Lerner indicator and the Boone indicator. Evidence is provided that similar loans...

We analyze the relationship between loan pricing and market concentration in the US corporate loan market by creating a measure of markup using banks’ internal loan risk assessments. Our risk-adjusted measure of markup is orthogonal to the subsequent performance of loans, while a measure that...

We investigate the welfare consequences of consumer credit regulation in a dynamic, heterogeneous-agent model with endogenous lender market power. We incorporate a decentralized credit market with search and incomplete information frictions into an off-the-shelf Eaton-Gersovitz model of consumer...