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U.S. Small Business Administration loans and U.S. state-level employment

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  • Paul E. Orzechowski

    (CUNY – College of Staten Island)

Abstract

This study examines the relationship between the U.S. Small Business Administration’s (SBA) lending programs and state-level employment from the early 1990s to 2013 using quarterly panel data for U.S. states with fixed effects. The results show a positive statistical relationship between the growth in SBA lending per capita and the change in the state’s civilian employment rates. Despite these statistically significant relationships, the coefficient sizes are small. An analysis of high and low personal income states shows no meaningful differences in the relationship between SBA lending and employment across these groups. These findings support the idea that SBA lending programs may help with the public policy goal of assisting small businesses and may contribute to the finance–growth nexus.

Suggested Citation

  • Paul E. Orzechowski, 2020. "U.S. Small Business Administration loans and U.S. state-level employment," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(3), pages 486-505, July.
    • Handle: RePEc:spr:jecfin:v:44:y:2020:i:3:d:10.1007_s12197-019-09495-3
    DOI: 10.1007/s12197-019-09495-3
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    More about this item

    Keywords

    U.S. Small Business Administration; Small business loans; Small business economics; Employment;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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