Capital Mobility and Regulation Frictions: Evidence from U.S. Lottery Winners

64 Pages Posted: 2 Dec 2015 Last revised: 1 Jul 2021

See all articles by Carlos Parra

Carlos Parra

Pontifical Catholic University of Chile - School of Business

Date Written: June 30, 2021

Abstract

Using a new source of quasi-experimental variation in bank funding from jackpot lottery winners, I show that funds are transmitted across markets, but allocations are substantially greater in the state in which the shock occurs. These results are not explained by local demand or bank charter type and are robust to comparing contiguous CBSA-pairs across state borders. Consistent with features of banking regulation reducing fund mobility (Section 109), the effects are more pronounced for banks for which the regulation binds. These results suggest that, despite the banking deregulation, state boundaries matter for capital mobility partly because of regulatory frictions.

Keywords: Financial Integration, Banking Regulation, Credit Supply, Policy Distortions, Mega Millions, Powerball

JEL Classification: G21, G28, G32

Suggested Citation

Parra, Carlos, Capital Mobility and Regulation Frictions: Evidence from U.S. Lottery Winners (June 30, 2021). Available at SSRN: https://ssrn.com/abstract=2696283 or http://dx.doi.org/10.2139/ssrn.2696283

Carlos Parra (Contact Author)

Pontifical Catholic University of Chile - School of Business ( email )

Vicuna Mackenna 4860
Santiago
Chile

HOME PAGE: http://www.carlosrparra.com/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
473
Abstract Views
3,543
rank
77,703
PlumX Metrics