The DI builds community and expertise around the digital transformation of the economy at HBS and beyond through curated content, facilitated exchange, and thought leadership.
America's infrastructure woes and how to fix them were front and center at the recent summit, America on the Move: Transportation and Infrastructure for the 21st Century, led by Rosabeth Moss Kanter.
October
10, 2018
|
3:00pm -
4:30pm
| Cumnock 230
| Open to public
Organizer: Negotiation, Organizations & Markets Unit
Seminar
| Entrepreneurial Management Seminar
Michael Bordo, Rutgers School of Arts and Sciences John Duca, Oberlin College & Conservatory
The Impact of the Dodd-Frank Act on Small Business
There are concerns that the Dodd-Frank Act (DFA) has impeded small business lending. By increasing the fixed regulatory compliance requirements needed to make business loans and operate a bank, the DFA disproportionately reduced the incentives for all banks to make very modest loans and reduced the viability of small banks, whose small-business share of C&I loans is generally much higher than that of larger banks. Despite an economic recovery, the small loan share of C&I loans at large banks and banks with $300 or more million in assets has fallen plunged 9 percentage points since the DFA was passed in 2010, with the magnitude of the decline twice as large at small banks. Controlling for cyclical effects and bank size, we find that these declines in the small loan share of C&I loans are almost all statistically attributed to the change in regulatory regime. Examining Federal Reserve survey data, we find evidence that the DFA prompted a relative tightening of bank credit standards on C&I loans to small versus large firms, consistent with the DFA inducing a decline in small business lending through loan supply effects. We also empirically model the pace of business formation, finding that it had downshifted around the time when the DFA and the Sarbanes-Oxley Act were announced. Timing patterns suggest that business formation has more recently ticked higher, coinciding with efforts to provide regulatory relief to smaller banks via modifying rules implementing the DFA. The upturn contrasts with the impact of the Sarbanes-Oxley Act, which appears to persistently restrain business formation.
October
10, 2018
|
1:30pm -
3:00pm
| Baker Library | Bloomberg Center 101
| Faculty and doctoral students only
