Abstract

http://ssrn.com/abstract=2157707
 
 

References (41)



 


 



Business Microloans for U.S. Subprime Borrowers


Cesare Fracassi


University of Texas at Austin

Mark J. Garmaise


University of California, Los Angeles (UCLA) - Anderson School of Management

Shimon Kogan


University of Texas at Austin

Gabriel Natividad


New York University (NYU) - Leonard N. Stern School of Business

May 14, 2014

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
We show that business microloans to U.S. subprime borrowers have a very large impact on subsequent firm success. Using data on startup loan applicants from a lender that employed an automated algorithm in its application review, we implement a regression discontinuity design assessing the causal impact of receiving a loan on firms. Startups receiving funding are dramatically more likely to survive, enjoy higher revenues and create more jobs. Loans are more consequential for survival among subprime business owners with more education and less managerial experience.

Number of Pages in PDF File: 50

JEL Classification: G32, L26, M13

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Date posted: October 6, 2012 ; Last revised: May 15, 2014

Suggested Citation

Fracassi, Cesare and Garmaise, Mark J. and Kogan, Shimon and Natividad, Gabriel, Business Microloans for U.S. Subprime Borrowers (May 14, 2014). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=2157707 or http://dx.doi.org/10.2139/ssrn.2157707

Contact Information

Cesare Fracassi
University of Texas at Austin ( email )
Red McCombs School of Business
1 University Station B660
Austin, TX 78712
United States
Mark J. Garmaise (Contact Author)
University of California, Los Angeles (UCLA) - Anderson School of Management ( email )
110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
Shimon Kogan
University of Texas at Austin ( email )
Austin, TX 78712
United States
512-232-6839 (Phone)
Gabriel Natividad
New York University (NYU) - Leonard N. Stern School of Business ( email )
Tisch Hall
40 West 4th Street, Suite 7-23
New York, NY 10012
United States
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