Racial Protests and Credit Access

We examine the impact of local racial demonstrations, such as Black Lives Matter (BLM) protests, and the subsequent racial justice movement following the death of George Floyd on racial disparities in Paycheck Protection Program loan disbursements to small businesses. Using difference-in-differences and event-study methodologies, we find that local racial protests improved credit access for Black business owners. Additionally, the increased social media and public attention following Floyd's death affected the public perception of racial equity issues, resulting in a positive moderating effect on the loan amounts distributed to Black owners relative to other racial-ethnic groups. Our findings indicate that both implicit and explicit racial bias decreased after Floyd’s death, including finance occupations.