Working Paper: After the Storm: How Emergency...
Abstract: Does emergency credit prevent long-term financial distress? We study the causal effects of government-provided recovery loans to small businesses following natural disasters. The rapid financial injection might enable viable firms to survive and grow or might hobble precarious firms with more risk and interest obligations. We show that the loans reduce exit and bankruptcy, increase employment and revenue, unlock private credit, and reduce delinquency. These effects, especially the crowding-in of private credit, appear to reflect resolving uncertainty about repair. We do not find capital reallocation away from neighboring firms and see some evidence of positive spillovers on local entry.
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Additional Information
| Field | Value |
|---|---|
| Data last updated | October 23, 2024 |
| Metadata last updated | October 23, 2024 |
| Created | October 23, 2024 |
| Format | |
| License | License not specified |
| Id | f068f1fe-5780-44f5-8cc5-e4d769e6ffa0 |
| Mimetype | application/pdf |
| On same domain | True |
| Package id | e25ace14-4c44-4f3f-971a-659da9e8a496 |
| Size | 4.7 MiB |
| State | active |
| Url type | upload |