Troubled Asset Relief Program: Impact as seen in the Agricultural Sector

I extend Butler and Cornaggia (2011) to examine the impact on agricultural productivity of shocks in access to capital and the impact of the Troubled Asset Relief Program (TARP) in moderating these shocks. Adapting their empirical methodology in Butler and Cornaggia (2011), I find that the financial crisis of 2008 exacerbates the negative relation between counties with low access to capital and productivity. Further, I find that this negative relation is reduced in counties where more banks took advantage of TARP financing. My results underscore the impact of access to capital on productivity and also suggest that the TARP has beneficial effects in the agricultural sector.