Fueling Job Engines: Impacts of Small Business Loans on Establishment Births in Metropolitan and Nonmetro Counties

Tessa Conroy, Sarah A. Low, Stephan Weiler

Research output: Contribution to journalArticlepeer-review

Abstract

This study examines the effect of small business loans on subsequent establishment births in U.S. counties. Using an economic growth framework and cross-sectional empirical model, we test the hypothesis that the establishment birth rate is higher in counties where the level and annual increase in lending is greater, controlling for community-level characteristics affecting business and economic dynamics. We also consider the long-term effect of small business lending and focus on establishing the appropriate lag structure. The results indicate that small business lending does generally have a positive effect on the employer establishment birth rate that is strongest in nonmetropolitan (rural) counties. (JEL L26, R11, M13).

Original languageEnglish (US)
Pages (from-to)578-595
Number of pages18
JournalContemporary Economic Policy
Volume35
Issue number3
DOIs
StatePublished - Jul 2017
Externally publishedYes

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics
  • Public Administration

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