IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v55y2023i59p7033-7047.html
   My bibliography  Save this article

Local individualism culture and lower third-party guarantee loan defaults: evidence from SBA loans in the US

Author

Listed:
  • Pankaj C. Patel
  • Rana Mostaghel
  • Pejvak Oghazi

Abstract

Building on the literature on individualistic culture and entrepreneurship, we use variation in a US county’s frontier experience (rugged individualism) as a proxy for local individualism to explain variation in SBA loan default rates. For every 10-year increase in frontier experience in a county (ranging from 0 to 63 years between 1790 and 1890), the hazard of default was 0.964 times lower, a small but economically meaningful effect. The effects are more salient for sole proprietors and robust to economic shocks from neighbouring shale boom counties and placebo tests. The results indicate that expanding the eligibility requirements for SBA loans to include individuals from US counties with individualistic cultures may be beneficial.

Suggested Citation

  • Pankaj C. Patel & Rana Mostaghel & Pejvak Oghazi, 2023. "Local individualism culture and lower third-party guarantee loan defaults: evidence from SBA loans in the US," Applied Economics, Taylor & Francis Journals, vol. 55(59), pages 7033-7047, December.
    • Handle: RePEc:taf:applec:v:55:y:2023:i:59:p:7033-7047
    DOI: 10.1080/00036846.2023.2206993
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2023.2206993
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2023.2206993?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:55:y:2023:i:59:p:7033-7047. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.