Regional favoritism in access to credit

e examine the efect of regional favoritism on the access of frms to credit. Using frm level data on a large sample of 29,000 frms covering 47 countries, we investigate the
hypothesis that frms in the birth regions of national political leaders have better access to
credit. Our evidence suggests that frms located in birth regions of political leaders are less
likely to be credit constrained. We further fnd that frms in leader regions feel less discouraged in applying for loans and also get preferential lending from banks.