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http://ssrn.com/abstract=1927997
 
 

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Does Local Access to Finance Matter?: Evidence from U.S. Oil and Natural Gas Shale Booms


Erik Gilje


University of Pennsylvania - The Wharton School

September 15, 2011


Abstract:     
I use oil and natural gas shale discoveries as a natural experiment to identify whether local access to finance matters for economic outcomes. Shale discoveries lead to large unexpected personal wealth windfalls, which result in an exogenous increase in local bank deposits and a positive local credit supply shock. Using this shock I examine whether local credit supply influences economic outcomes and how local banking market structure affects the importance of credit supply. After a credit supply shock, the number of business establishments in industries more reliant on external finance increases 4.6% relative to those less reliant on external finance. This increase is more than five times higher in counties dominated by small banks relative to all other counties. After banking deregulation, the adoption of lending technology and increased securitization of loans, local credit supply still matters, especially in areas dominated by small banks.

Number of Pages in PDF File: 51

Keywords: Credit Supply, Bank Lending, Bank Deposits, Shale, Exogenous Shock

JEL Classification: G21, G30, E44

working papers series


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Date posted: September 17, 2011 ; Last revised: May 7, 2013

Suggested Citation

Gilje, Erik, Does Local Access to Finance Matter?: Evidence from U.S. Oil and Natural Gas Shale Booms (September 15, 2011). Available at SSRN: http://ssrn.com/abstract=1927997 or http://dx.doi.org/10.2139/ssrn.1927997

Contact Information

Erik Gilje (Contact Author)
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
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