“…This finding builds upon previous literature, which shows that the relaxation of bank branching laws in the 1970s and 1980s led to beneficial product market effects, such as higher rates of new firm incorporations as well as an increase in the number of firms in operation (e.g., Black and Strahan, 2002;Cetorelli and Strahan, 2006). Third, our study is related to the literature on the role of bank credit lines in corporate liquidity management (e.g., Houston and James, 2001;Sufi, 2009;Campello et al, 2011) and the literature on the causes and consequences of contagion in financial and product markets (e.g., Lang and Stulz, 1992;Calomiris et al, 1995;Kohler et al, 2000;Nilsen, 2002;Choi and Kim, 2005;Hertzel et al, 2008;Cohen and Frazzini, 2008;Duchin et al, 2010;Hertzel and Officer, 2012;Houston et al, 2012;Boissay and Gropp, 2013). Finally, a contemporaneous paper by Garcia-Appendini and Montoriol-Garriga (2013) uses cash holdings as a liquidity measure and shows that more liquid suppliers offered higher trade credit to less liquid customers during the 2007-2008 crisis.…”