Firm Volatility and Banks: Evidence from U.S. Banking Deregulation

摘要: This paper exploits the staggered timing of state-level banking deregulation in U.S. during 1980s to study causal effect integration on volatility nonfinancial corporations. We find that firm-level employment, production, sales, and cash flows are less volatile after interstate deregulation. The decrease is stronger for firms have limited access external finance, suggesting bankdependent exploit wider finance smooth out idiosyncratic shocks. In fact, short-term credit becomes procyclical out-of-state bank entry permitted. Finally, lower real-side variables translates into risk stock returns. If enhances efficiency intermediation promotes development system, our results suggest may firm non-financial sectors.