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SBA guaranteed lending and local economic growth


  • Ben R. Craig
  • William E. Jackson
  • James B. Thomson


Increasingly, policymakers look 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's (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 economic performance. We find a positive and significant (although economically small) relationship between the relative levels of SBA guaranteed lending in a local market and the future per capita income growth in that market.

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  • Ben R. Craig & William E. Jackson & James B. Thomson, 2005. "SBA guaranteed lending and local economic growth," FRB Atlanta Working Paper 2005-28, Federal Reserve Bank of Atlanta.
  • Handle: RePEc:fip:fedawp:2005-28

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    Cited by:

    1. Ben Craig & William Jackson & James Thomson, 2008. "Credit market failure intervention: Do government sponsored small business credit programs enrich poorer areas?," Small Business Economics, Springer, vol. 30(4), pages 345-360, April.
    2. Craig E. Armstrong & Ben R. Craig & William E. Jackson & James B. Thomson, 2010. "The importance of financial market development on the relationship between loan guarantees for SMEs and local market employment rates," Working Paper 1020, Federal Reserve Bank of Cleveland.
    3. Ben R. Craig & William E. Jackson & James B. Thomson, 2006. "Small firm credit market discrimination, SBA-guaranteed lending, and local market economic performance," Working Paper 0613, Federal Reserve Bank of Cleveland.
    4. Ben R. Craig & William E. Jackson & James B. Thomson, 2006. "Small-firm credit markets, SBA-guaranteed lending, and economic performance in low-income areas," Working Paper 0601, Federal Reserve Bank of Cleveland.

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