LENDING CYCLES AND REAL OUTCOMES: COSTS OF POLITICAL MISALIGNMENT

• 成果类型: Article
• 署名作者: Bircan, Cagatay; Saka, Orkun
• 署名单位: European Bank of Reconstructon & Development; University of Sussex; University of London; London School Economics & Political Science
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueab020
• 发表日期: 2021
• 页码: 2763-2796
• 关键词: government-owned banks; Aggregate productivity; incumbency advantage; misallocation; credit; distortions; state

摘要

We document a strong political cycle in bank credit and industry outcomes in Turkey. In line with theories of tactical redistribution, state-owned banks systematically adjust their lending around local elections compared with private banks in the same province based on electoral competition and political alignment of incumbent mayors. This effect only exists in corporate lending and creates credit constraints for firms in opposition areas, which suffer drops in assets, employment and sales but not firm entry. Financial resources and factors of production are misallocated as more efficient provinces and industries suffer the greatest constraints, reducing aggregate productivity.