Small Firm Finance, Credit Rationing, and the Impact of SBA-Guaranteed Lending on Local Economic Growth

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 (SBA) loan-guarantee program. Using a panel data set of SBA-guaranteed loans, we assess whether or not 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.     

The Moderating Influence of Financial Market Development on the Relationship between Loan Guarantees for SMEs and Local Market Employment Rates

We empirically examine whether a major government intervention in the small firm credit market yields significantly better results in markets that are less financially developed. The government intervention that we investigate is Small Business Administration (SBA) guaranteed lending. After controlling for the appropriate cross‐sectional market characteristics, we find that SBA guaranteed lending has a significantly more positive impact on the average annual level of employment when the local market is relatively less financially developed. This result has important implications for public policy directives concerning where SBA guaranteed lending should be directed.     

Income Per Capita Inequality in China: The Role of Economic Geography and Spatial Interactions

(1241) Laura Hering and Sandra Poncet This paper contributes to the analysis of growing income inequality in China. We apply a structural model of economic geography to data on per capita income over 190 Chinese cities between 1995 and 2002, and evaluate the extent to which market proximity and spatial dependence can explain the growing income inequality between Chinese cities. The econometric specification explicitly incorporates spatial dependence in the form of spatially‐lagged per capita income. We show that the geography of market access and spatial dependence are significantly correlated with per capita income in China. Market access is particularly important in cities with smaller migration inflows, which is consistent with NEG theory, whereas spatially‐lagged per capita income matters more in cities with greater immigration. We conclude that the positive impact of spatially‐lagged income partly results from labour mobility between neighbours, so that spatial dependence reflects the influence of migration, knowledge transfers and increasing competition between cities.     

Cyclicality of lending in Africa: The influence of bank ownership

Ownership structure of banks has dramatically changed over the past two decades in African countries with privatization and foreign bank entry, including the expansion of Pan-African banks. The objective of this paper is to investigate how bank ownership influences cyclicality of lending in Africa. We are then able to assess how changes in bank ownership influence the economy. To this end, we measure the sensitivity of bank loan growth to GDP per capita growth of the host country with dynamic GMM estimations. We use panel data from 190 commercial banks covering 20 African countries spanning the period from 2002 to 2015. We find that lending of African banks is procyclical for all types of banks. However, we observe that Pan-African banks are the least procyclical banks, while no significant difference in procyclicality is observed between state-owned banks, domestic private banks, and other foreign banks. In addition, we find evidence that foreign banks are influenced by GDP per capita growth of their home country. Therefore, our findings support the view that the expansion of Pan-African banks contributes to reduce cyclicality of lending. However, foreign bank entry can enhance the transmission of external shocks.     

Local Public Corruption and Bank Lending Activity in the United States

Using a conviction-based measure, we find that local (state-level) public corruption exerts a negative effect on the lending activity of US banks. Our baseline estimations show that the difference in public corruption between, for example, Alabama, where corruption is high, and Minnesota, where corruption is low, implies that banks headquartered in the former state grant 0.55% less credit (or $3.52 million for the average bank) ceteris paribus. Using proxies for relationship lending and monitoring, we also find that these bank characteristics weaken the negative effect of public corruption on lending. These results are robust to tests that address endogeneity, to the use of perception-based measures of corruption, and after controlling for credit demand conditions. In further analysis, we show that these effects are more evident for smaller banks and banks operating in a single state. These findings provide evidence that public corruption could facilitate information asymmetry in the lending market and, thus, could hinder local development by reducing bank credit.

     

Per capita income,market access costs,and trade volumes

There is strong empirical evidence that countries with lower per capita income tend to have smaller trade volumes even after controlling for aggregate income. Furthermore, poorer countries do not just trade less, but have a lower number of trading partners. In this paper, I construct and estimate a general equilibrium model of trade that captures both these features of the trade data. The key element of the model is an association between trade costs (both variable and fixed) and countries' development levels, which can account for the effect of per capita income on trade volumes and explain many zeros in bilateral trade flows. I find that market access costs play an important role in fitting the model to the data. In a counterfactual analysis, I find that removing the asymmetries in trade costs raises welfare in all countries with an average percentage change equal to 29% and larger gains for smaller and poorer countries. Real income inequality falls by 43%.     

农民收入水平对农村家庭能源消费结构影响的实证分析

本文依据调查资料,利用层次分析法实证分析了农民收入水平对农村家庭能源消费结构的影响,得出结论:农户的收入水平对农村家庭生活用能源种类的选择影响较大,因此不同收入水平的农户家庭能源消费的结构存在较大的差异;人均收入在4000元以下的农户,户用沼气的权系数最大,人均收入超过4000元的农户,液化气的权系数最大;农户的收入越高,对能源的舒适性、便利性、卫生特性的要求越高,农户的收入越低,对能源的经济性则考虑得越多;使用无成本、又便利的户用沼气非常适合在收入水平较低的农村地区推广。     

Comprehensive Homeowners Microinsurance in Brazil: Estimation of Pricing and Market Potential

This study examines the question of comprehensive microinsurance for Brazilian homeowners. In particular, the study calculates (i) pricing for selected types of microinsurance homeowner's coverages and insured amounts and (ii) the estimated market potential of this product. The Brazilian agency charged with responsibility for regulation of private insurance, SUSEP, has determined that microinsurance should be aimed at families with a monthly per capita income of up to two minimum wages. According to this criterion, the study finds that there are more than 42 million households in Brazil eligible for microinsurance. The study also finds that microinsurance premiums for these households would be very low (US $0.97 to 2.03 per month)—less than 1% of average household income. This type of insurance would certainly be viable, considering the calculated market size of approximately US $780 million per year. These figures show that there is significant potential for the expansion of the microinsurance market in Brazil.     

Bank market power,ownership, regional presence and revenue diversification: Evidence from Africa

We provide the first evidence that African banks with greater market power in lending and deposit markets earn more from non-traditional activities. This is consistent with dominant banks' ability to identify better non-traditional opportunities and utilize their greater bargaining capacity in contract creation. Non-African-owned banks are found to exploit non-traditional banking and earn higher non-interest income. In contrast, African banks in other African countries focus more on traditional financial intermediation. Our findings are important to other emerging markets because their banks are traditionally focused on financial intermediation and regulations and supervision in relation to non-traditional activities are relatively less developed.     

技术创新、市场分割与收入不平等——基于中国省级面板数据的分析

基于1998—2017年中国省级面板数据，分析了省级层面收入不平等程度及其影响因素，重点研究了技术创新和市场分割对收入不平等的作用。研究结果显示，样本期内基尼系数总体水平较高，呈现出了先上升后下降的走势。地区收入差距与技术创新之间存在U型关系，当前“知识溢出”效应超过了“技能溢价”效应，创新水平的提高将有助于缩小地区收入差距；市场分割不仅会加剧地区收入不平等，还会通过阻碍技术创新间接弱化创新对收入差距的缓解作用。地区收入不平等与经济发展水平之间存在倒U型关系，贸易依存度、人均受教育年限和人均社会保障支出的提高有助于缩小地区收入差距，工业化率的提高则会加剧地区收入差距，财政支出对地区收入差距的作用不明显；动态面板模型的研究结果表明，地区收入差距具有惯性特征。最后，基于研究结论，给出了有针对性的政策建议。     

An overview of the securitization of SBA guaranteed loans originated by commercial banks

Securitization involves the repackaging of individual SBA Guaranteed loans made by financial institutions into pools of varying maturities for resale to intermediaries and final investors. Pool volume has been increasing at a rapid rate since the program's inception in 1985. National and regional investment companies, acting as intermediaries, are the major pool buyers. Investors in pools include banks, savings & loans associations, and pension funds. Securitization has resulted in a major secondary market for institutions that make SBA Guaranteed loans. Public policy goals are served by the increase in SBA lending activity that appears related to the securitization process.     

Financial underdevelopment,distorted lending and export market survival

This paper examines the impact of financial development on exporter survival in foreign markets with Chinese firm-level data over the period 1998–2008. We measure financial development using the size, lending efficiency, term structure of bank loans and degree of state intervention in financial resource allocation, respectively. We find that a larger scale and greater efficiency of bank lending and less state intervention facilitate while the relative abundance of long-term credit deteriorates exporter survival. These effects are more pronounced for private exporters compared with state-owned exporters. For foreign-invested exporters, weakened state intervention is of relatively great importance. We attribute this disproportional impact to the government's intervention in funding investment and the distortional lending of banks, which varies across regions and industries with different levels of presence of state-owned enterprises.     

Banking sector reforms and corporate leverage in emerging markets

Using a large panel of non-financial firms in emerging markets, we study the relation between detailed measures of banking sector reforms and corporate leverage. We find that banking sector reforms are associated with lower corporate debt in emerging market firms, consistent with the notion that these reforms improve banks' risk management and result in tighter lending standards, leading firms to use less bank debt in their capital structure. These effects are less pronounced for financially constrained firms, suggesting a relative increase in the supply of bank credit to firms which were rationed prior to the banking sector reforms.     

土家族农村居民生活消费特征:基于渝东南地区的分析

基于渝东南土家族地区农村居民人均生活消费与人均纯收入的时间序列分析,构建消费函数模型。模型表明该地区农村居民的消费特征与相对收入假说相吻合,同时显示该地区居民边际消费与平均消费倾向偏高。针对这些特点,从该地区的经济特征、居民收入水平、土家族消费文化等方面分析其缘由,并探讨其政策导向。     

Who Benefits from Longer Lending Relationships? An Analysis on European SMEs

This paper empirically investigates the impact of lending relationships duration on SMEs financial stability. Our research hypothesis is that the balance between benefits and costs of longer bank‐firm ties may be different depending on the degree of firms' financial health. Using a large sample of European manufacturing SMEs that excludes firms that have defaulted and those with less than ten employees, we find that the overall positive effect of enduring lending relationships tends to progressively increase for more stable firms, being greater when the main bank operates nearby the firm. Our findings, yet, are conditional on firm survival and may not be generalized to the smallest of firms.     

Political uncertainty and city bank lending in China: Evidence from city government official changes

Using data hand collected in China between 2001 and 2016, this paper examines how political uncertainty affects city bank lending. Our results show that political uncertainty causes banks to significantly increase loan growth. These results are moderated by the characteristics of government officials, bank characteristics, and the degree of marketization. Our results further show that changes by government officials increase medium-term loan growth, mainly for the real estate and public utilities sector. Finally, we show that city government official changes increase bank lending and, thus, increase credit risk, that is, bank lending has a mediating effect.     

Demand for Lottery Products in Massachusetts

The characteristics of demand are examined for the state lottery in Massachusetts, which leads the nation in per capita sales. Cross-sectional OLS regressions of sales per capita are calculated for 1983 and 1990 for each lottery product using explanatory variables representing education, income, race, ethnicity, and age. The results suggest that the lottery no longer exhibits the degree of tax progressivity it had in earlier years and is currently a regressive source of government revenue. While sales of all lottery products consistently decrease with increasing education levels, this inverse relationship has moderated over time. Ethnicity and race are also becoming less of a factor though race is perhaps still important for lottery products combining relatively small payoffs with a high probability of winning. From 1983 to 1990, the 65 and over age group became a significant factor in raising per capita sales of the Massachusetts lottery, thus raising issues of generational and distributional equity.     

Economic geography and international inequality

This paper estimates a structural model of economic geography using cross-country data on per capita income, bilateral trade, and the relative price of manufacturing goods. We provide evidence that the geography of access to markets and sources of supply is statistically significant and quantitatively important in explaining cross-country variation in per capita income. This finding is robust to controlling for a wide range of considerations, including other economic, geographical, social, and institutional characteristics. Geography is found to matter through the mechanisms emphasized by the theory, and the estimated coefficients are consistent with plausible values for the model's structural parameters.     

Are Foreign Banks Better Performers Than Domestic Counterparts? Examining the Financialization Hypothesis in Mexico

This article analyzes the relationship between “financialization” and the performance of credit institutions in Mexico over the period 1999–2013. On average, foreign banks have higher cost-to-income ratio and return on assets than domestically owned banks. Non-interest income to gross revenue positively contributes to foreign bank profits, which highlights income other than conventional banking transactions. When considering references in the literature to non-interest income as a proxy for financialization, our results imply that domestic banks are more dependent on traditional lending, such as interest-earning assets, whereas foreign banks seem to engage in greater diversification to support profitability. Overall, the banking system reveals tendencies (“financialization”) that can possibly work against credit facilitation in Mexico.     

加速商品流通促进消费扩大内需

运用Feldstein和Ascauser的模型,对城市、农村以及全体居民的人均消费、人均可支配收入和人均财政支出进行分析,可以看出,人均可支配收入、人均财政支出以及人均消费逐年增加,具有相同的趋势。并且人均可支配收入、人均财政支出的逐年增加,对于人均消费的提高分别具有积极地促进作用。而推动商品流通的良好发展,可以提高城市居民人均可支配收入以及增加政府财政支出,促进城市居民人均消费增加,即有效扩大内需。政府机构要加强市场流通体系以及商品流通基础设施建设;开拓消费领域,完善消费政策;推动农村商品流通,刺激农村居民消费。