The politics of the Paycheck Protection Program

Deniz Igan; Thomas Lambert; Prachi Mishra; Eden Quxian Zhang

doi:10.1093/rcfs/cfaf013

The politics of the Paycheck Protection Program

Deniz Igan, Thomas Lambert, Prachi Mishra, Eden Quxian Zhang

Banking & Finance

Research output: Contribution to journal › Article › Research › peer-review

Abstract

Does partisanship influence loan allocation through the Paycheck Protection Program (PPP)? We examine the 2020 Presidential campaign contributions made by lenders’ employees as a partisanship measure and leverage the PPP’s phased implementation under both the Trump and the Biden administrations. We find that partisan misalignment increases lending, particularly to small and first-time PPP borrowers, as well as those in Republican areas. Misalignment is also associated with higher payroll coverage for small businesses. Our findings are consistent with Republican-leaning lenders viewing the PPP’s 2021 phase as a legacy policy of the prior administration, shedding new light on the partisan-alignment phenomenon in finance.

Original language	English
Pages (from-to)	1083-1122
Number of pages	40
Journal	Review of Corporate Finance Studies
Volume	14
Issue number	4
DOIs	https://doi.org/10.1093/rcfs/cfaf013
Publication status	Published - Nov 2025

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10.1093/rcfs/cfaf013Licence: CC BY

734550551-oaFinal published version, 2.05 MBLicence: CC BY

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The politics of the Paycheck Protection Program

Abstract

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