Bridging the Gap? Government Subsidized Lending and Access to Capital

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Oxford Journals Contact Us My Basket My Account Review of Corporate Finance Studies About This Journal Contact This Journal Subscriptions View Current Issue (Volume 2 Issue 1 March 2013) Archive Search Oxford Journals EconomicsSocial Sciences Review of Corporate Finance Studies Volume 2 Issue 1 Pp. 98-128. Bridging the Gap? Government Subsidized Lending and Access to Capital Kristle Romero Cortés

Federal Reserve Bank of Cleveland Josh Lerner

Harvard University Send correspondence to Kristle Cortés, Federal Reserve Bank of Cleveland, 1455 East 6th St., Cleveland, OH 44114, USA. E-mail: kristle.cortes{at}researchfed.org. The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Cleveland or the Federal Reserve System. All errors and admissions are our own. Abstract The consequences of providing public funds to financial institutions remain controversial. We examine the Community Development Financial Institution (CDFI) Fund’s impact on credit union activity, using hitherto little studied U.S. Treasury data. The CDFI Fund grants increase lending at credit unions by 3%. For every dollar awarded, 45 additional cents are loaned out to borrowers in the first year, and up to an additional $1.60 is loaned out within three years. Delinquent loan rates also increase slightly. Our panel results are supported by a broadband regression discontinuity analysis. Politics does not seem to play a role in allocating funding. (JEL G28)

© The Author 2013. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com. « Previous | Next Article » Table of Contents This Article Review of Corporate Finance Studies (2013) 2 (1): 98-128. doi: 10.1093/rcfs/cft002 First published online: January 30, 2013 » Abstract Full Text (HTML) Full Text (PDF) All Versions of this Article: cft002v1 2/1/98 most recent Classifications Articles Services Alert me when cited Alert me if corrected Find similar articles Similar articles in Web of Science Add to my archive Download citation Request Permissions Citing Articles Load citing article information Citing articles via CrossRef Citing articles via Scopus Citing articles via Web of Science Google Scholar Articles by Cortés, K. R. Articles by Lerner, J. Related Content Load related web page information Share Email this article CiteULike Delicious Facebook Google+ Mendeley Twitter What's this?

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