Theory suggests that by lending to a firm, inside banks gain an informational advantage over non-lender outside banks. This informational gap hinders borrowers from switching lenders due to a winner's curse faced by competing outside banks, leading to hold-up problems. In this paper, we show...

We show that climate transition risks can significantly disrupt supply chain networks. Specifically, suppliers affected by the California cap-and-trade program are more likely to lose customer relationships and less likely to form new ones compared to their competitors unaffected by the program....