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SSRN
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From Housing Bust to Credit Crunch: Evidence from Small Business Loans

SSRN Electronic Journal
2011
  • 8
    Citations
  • 1,001
    Usage
  • 1
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    8
    • Citation Indexes
      5
    • Policy Citations
      3
      • Policy Citation
        3
  • Usage
    1,001
    • Abstract Views
      907
    • Downloads
      94
  • Captures
    1
    • Readers
      1
      • SSRN
        1
  • Ratings
    • Download Rank
      562,007

Article Description

This paper provides evidence that the recent housing bust in the United States precipitated a “credit crunch” for small businesses. We compare banks’ small business lending in the same metropolitan areas, and find that those that originated or purchased more of their mortgage loans in depressed housing markets elsewhere reduced local lending more substantially. The findings suggest a substantial spill-over effect across sectors and geographical areas. The effect is greater for banks with more than $10bn in assets. Overall, the fall in house prices accounted for one third of the decline in small business loans originated by major banks in the U.S. from 2007 to 2009.

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