Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148587
Authors: 
Hanspal, Tobin
Year of Publication: 
2016
Series/Report no.: 
SAFE Working Paper Series 161
Abstract: 
I show that disruptions to personal sources of financing, aside from commercial lending supply shocks, impair the survival and growth of small businesses. Entrepreneurs holding deposit accounts at retail banking institutions that defaulted following the financial crisis reduce personal borrowing and are consequently more likely to exit their firm. Exposure to the corresponding investment losses from delisted publicly traded bank stocks strongly reduces the rate of firm survival, particularly for early-stage ventures. At the intensive margin, owners who remain in business reduce employees after personal wealth losses. My results suggest that personal finance is an important component of firm financing.
Subjects: 
Entrepreneurship
Small business
Personal finance
Financial crisis
Bank defaults
JEL: 
L26
D14
G01
G11
G21
G33
Document Type: 
Working Paper

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