Essays in banking and corporate finance.

Summary This thesis consists of three separate chapters. The first chapter examines the causal relationship between the supply of syndicated loans by banks and campaign contributions by non-financial firms in the United States during the 2007-2008 financial crisis. The results indicate that a 10% decrease in the loan supply to a given firm by its pre-crisis lenders during the first crisis period leads to a 9% increase in campaign contributions by that firm in 2008. Moreover, the level of campaign contributions by firms in the past is positively associated with favorable lending terms in the future. The results support the idea that campaign contributions are an investment in political capital rather than simply a form of consumer good. The second chapter identifies the effect of banks' pre-entry industrial exposure on output growth in manufacturing sectors. The results indicate that the greater the difference in specialization in a sector between two states, the greater the impact of banking integration on the growth of that sector in the less specialized state. The final chapter examines whether banking integration in multiple regions has an impact on the market for control of firms between them. The results indicate that there are more mergers, acquisitions, and divestitures in state pairs whose banking systems have experienced greater integration, compared with state pairs without such integration. The results in the last two chapters indicate a banking channel that shapes the state industrial landscape.