Who Supplies PPP Loans (And Does it Matter)? (NBER Working Paper 28286)
Summary
An NBER Working Paper 28286, “Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships and the COVID Crisis” by Lei Li and Philip Strahan, with an Issue Date of December 2020. The abstract analyzes bank supply of credit under the Paycheck Protection Program (PPP). It says that despite imposing no risk, PPP supply reflects traditional measures of relationship lending: decreasing in bank size and increasing in prior experience, in commitment lending and in core deposits. The abstract concludes that bank PPP supply, based on the structure of the local banking sector, alleviates increases in unemployment. A published version is listed in the Journal of Financial and Quantitative Analysis, vol 56(7), pages 2411-2438.
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“Who Supplies PPP Loans (And Does it Matter)? (NBER Working Paper 28286).”
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Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships and the COVID Crisis Lei Li & Philip Strahan Working Paper 28286 DOI 10.3386/w28286 Issue Date December 2020 We analyze bank supply of credit under the Paycheck Protection Program (PPP). The literature emphasizes relationships as a means to improve lender information, which helps banks manage credit risk. Despite imposing no risk, however, PPP supply reflects traditional measures of relationship lending: decreasing in bank size; increasing in prior experience, in commitment lending, and in core deposits. Our results suggest a new benefit of bank relationships, as they help firms access government-subsidized lending. Consistent with this benefit, we show that bank PPP supply, based on the structure of the local banking sector, alleviates increases in unemployment. - Copy Citation Lei Li and Philip Strahan, "Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships and the COVID Crisis," NBER Working Paper 28286 (2020), https://doi.org/10.3386/w28286. Download Citation Published Versions Lei Li & Philip E. Strahan, 2021. " Who Supplies PPP Loans (and Does It Matter)? Banks, Relationships, and the COVID Crisis, " Journal of Financial and Quantitative Analysis, vol 56(7), pages 2411-2438. Related Topics Financial Economics Financial Institutions COVID-19 Programs Corporate Finance More from the NBER In addition to working papers , the NBER disseminates affiliates’ latest findings through a range of free periodicals—the NBER Reporter , the NBER Digest , the Bulletin on Health , the Bulletin on the Economics of Alzheimer's , and the Bulletin on Entrepreneurship —as well as research spotlights, lectures, and panel videos . - Feldstein Lecture - Presenter: Mark Duggan Mark Duggan, who is currently the Wayne and Jodi Cooperman Professor of Economics at Stanford University and will soon... - Methods Lectures Research Associate Melissa Dell of Harvard University and Ashesh Rambachan of MIT delivered the 2026 Methods...
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