Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/280842 
Year of Publication: 
2022
Series/Report no.: 
Working Papers No. 22-23
Publisher: 
Federal Reserve Bank of Boston, Boston, MA
Abstract: 
We utilize Dun & Bradstreet data on firms' financial condition to examine the allocation of Paycheck Protection Program (PPP) loans and their impact. Three main findings emerge. First, firms in better financial condition prior to the COVID outbreak were advantaged in the allocation of PPP loans. Second, firms' financial condition improved significantly and persistently after receiving a loan, and this effect was more pronounced among the smaller and less financially sound firms. Third, we demonstrate empirically that the heterogeneity in firms' financial condition must be accounted for to correctly identify and estimate the overall effect of the PPP.
Subjects: 
Paycheck Protection Program
small business lending
financial frictions
JEL: 
H81
G28
J21
E24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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