Working Paper: NBER ID: w21733
Authors: J. David Brown; John S. Earle; Yana Morgulis
Abstract: Analyzing a list of all Small Business Administration (SBA) loans in 1991 to 2009 linked with annual information on all U.S. employers from 1976 to 2012, we apply detailed matching and regression methods to estimate the variation in SBA loan effects on job creation and firm survival across firm age and size groups. The number of jobs created per million dollars of loans generally increases with size and decreases in age. The results imply that fast-growing firms (“gazelles”) experience the greatest financial constraints to growth, while the growth of small, mature firms is least financially constrained. The estimated association between survival and loan amount is larger for younger and smaller firms facing the “valley of death”.
Keywords: SBA loans; job creation; firm survival; small businesses; financial constraints
JEL Codes: H81
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| firm size (L25) | job creation effect per million dollars of SBA loans (J23) |
| firm age (L10) | job creation effect per million dollars of SBA loans (J23) |
| SBA loan receipt (H81) | survival rate for younger and smaller firms (L26) |
| SBA loan receipt (H81) | survival rate (J17) |
| pre-existing growth trajectories (O41) | employment growth associated with SBA loans (M13) |
| SBA loan receipt (H81) | exit probability for younger firms (L26) |
| SBA loan receipt (H81) | survival rates for small mature firms (L26) |
| SBA loan receipt (H81) | employment outcomes (J68) |
| SBA loan receipt (H81) | survival outcomes (C41) |