Defunding controversial industries: Can targeted credit rationing choke firms?

• 成果类型: Article
• 署名作者: Sachdeva, Kunal; Silva, Andre F.; Slutzky, Pablo; Xu, Billy Y.
• 署名单位: University of Michigan System; University of Michigan; Federal Reserve System - USA; Federal Reserve System Board of Governors; University System of Maryland; University of Maryland College Park; University of Rochester
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2025.104133
• 发表日期: 2025
• 关键词: Targeted credit rationing; Firm-bank relationships; Controversial industries

摘要

This paper examines the effects of targeted credit rationing by banks on firms likely to generate negative externalities. We exploit an initiative of the U.S. Department of Justice, labeled Operation Choke Point, which compelled banks to limit relationships with firms in controversial industries. Using supervisory loan-level data, we show that, as intended, targeted banks reduced lending and terminated relationships with affected firms. However, most of these firms fully substituted credit through nontargeted banks under similar terms. Overall, we find no significant shifts in the performance and investment of affected firms, suggesting that targeted credit rationing is widely ineffective in promoting change.