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SBA-Loan Guarantees and Local Economic Growth

FRB of Cleveland Working Paper No. 0503

29 Pages Posted: 3 May 2005  

Ben R. Craig

Federal Reserve Bank of Cleveland

William E. Jackson III

Culverhouse College of Commerce, University of Alabama; Federal Reserve Bank of Atlanta

James B. Thomson

University of Akron

Date Written: April 2005

Abstract

Increasingly policymakers are looking to the small business sector as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs. Encouraging lending to small business is the primary policy objective of the Small Business Administration (SBA) loan-guarantee program. Using a panel data set of SBA-guaranteed loans we assess whether SBA-guaranteed lending has an observable impact on local and regional economic performance.

Keywords: small business, economic growth, loan guarantees, credit rationing, relationship lending

JEL Classification: G38, H81, O16

Suggested Citation

Craig, Ben R. and Jackson, William E. and Thomson, James B., SBA-Loan Guarantees and Local Economic Growth (April 2005). FRB of Cleveland Working Paper No. 0503. Available at SSRN: https://ssrn.com/abstract=712622 or http://dx.doi.org/10.2139/ssrn.712622

Ben R. Craig

Federal Reserve Bank of Cleveland ( email )

PO Box 6387
Cleveland, OH 44101
United States
216-579-2061 (Phone)
216-579-3050 (Fax)

William E. Jackson III

Culverhouse College of Commerce, University of Alabama ( email )

Culverhouse College of Commerce
Tuscaloosa, AL 35487-0225
United States
205.348.6217 (Phone)
205.348.6695 (Fax)

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

James B. Thomson (Contact Author)

University of Akron ( email )

Akron, OH 44325-4803
United States

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