<p>I study local shocks to consumer credit supply arising from the opening</p><p>of bank-related retail stores. Bank-related store openings coincide with</p><p>sharp increases in credit card placements in the neighborhood of the</p><p>store, in the months surrounding the store opening, and with the bank</p><p>that owns the store. I exploit this relationship to instrument for new</p><p>credit cards at the individual level, and find that obtaining a new</p><p>credit card sharply increases total borrowing as well as default risk,</p><p>particularly for risky and opaque borrowers. In line with theories of</p><p>default externality, I observe that existing lenders react to the</p><p>increased consumer borrowing and associated riskiness by contracting</p><p>their own supply. In particular, in the year following the issuance of a</p><p>new credit card, banks without links to stores reduce credit card limits</p><p>by 24-51%, offsetting most of the initial increase in total credit</p><p>limits.</p> / Dissertation
| Identifer | oai:union.ndltd.org:DUKE/oai:dukespace.lib.duke.edu:10161/12246 |
| Date | January 2016 |
| Creators | Correia, Sergio |
| Contributors | Adelino, Manuel, Puri, Manju |
| Source Sets | Duke University |
| Detected Language | English |
| Type | Dissertation |
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