Borrowing Constraints, Markups, and Misallocation

We are grateful to Aria Yaxuan Liu, Chen Gao, and Raymon Yue for outstanding research assistance. We thank Corina Boar, Joel David, Jan Eeckhout, Chad Jones, Pete Klenow, Sarah Lein, Virgiliu Midrigan, Michael Peters, Kunal Sangani, Yongseok Shin, Venky Venkateswaran, Tom Winberry, and seminar participants at the ASSA, the Federal Reserve Bank of Richmond, the Federal Reserve Bank of San Francisco, the Barcelona Summer Forum, Northwestern University, the Swiss Annual Macro Conference, UC Berkeley, Queen’s University, UC Davis, and the VII MadMac Annual Conference. The Census Bureau has reviewed this data product to ensure appropriate access, use, and disclosure-avoidance protection of the confidential source data used to produce it. This research was performed at a Federal Statistical Research Data Center under FSRDC Project Number 2441 (CBDRB-FY25-P2441-R11891). Yueran Ma acknowledges research support from the National Science Foundation under Grant #2144769. The views expressed herein are those of the authors and do not necessarily reflect the views of the of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System or the U.S. Census Bureau or the National Bureau of Economic Research.

• June 24, 2025