
handle: 10419/324799
How do firms overcome frictions when trade policy shocks disrupt supply chains? Linking shipment records to the U.S. credit register, we analyze how banks mitigated financial and information frictions facing firms who searched for suppliers after the 2018--2019 tariffs. Tariff-hit importers drew more on credit lines and took out loans at higher rates. Firms connected to specialized banks secured credit on better terms and replaced suppliers up to eleven months faster than similar firms with other banks. Our results highlight a new information channel through which specialized banks mitigate frictions and dampen policy shock transmission to the real economy.
financial frictions, trade policy, ddc:330, G21, bank lending, F34, supply chains, F42
financial frictions, trade policy, ddc:330, G21, bank lending, F34, supply chains, F42
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