 Banking Deserts and the Paycheck Protection ProgramKristopher Deming and Stephan Weiler Economic Development Quarterly, 2023, vol. 37, issue 3, 259-276 Abstract: The Paycheck Protection Program was a highly unusual policy measure enacted to provide bridge capital to support small businesses coping with the dramatic downturn in demand due to the COVID-19 pandemic. By design, the program effectively required potential applicants to work through the bank with whom they had a relationship. Yet large swathes of the country are effectively banking deserts, which dramatically steepen the gradient for those regions’ businesses seeking Paycheck Protection Program support. This paper tests the proposition that the exogenous distribution of banks effectively discriminated against those regions where banking services were limited, while also looking at whether loans were distributed to those areas with less dense employment opportunities and higher concentrations of small businesses. The authors find that areas with fewer banking services and lower employment opportunities were systematically disadvantaged in the Paycheck Protection Program distribution, while there were no significant flows to areas with higher rates of small businesses. Keywords: Paycheck Protection Program; COVID-19; public policy; banking; small business (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:37:y:2023:i:3:p:259-276 DOI: 10.1177/08912424231152873 Access Statistics for this article More articles in Economic Development Quarterly |
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