Economics Research Seminar Series: “Big Loans to Small Businesses: Predicting Winners and Losers in an Entrepreneurial Lending Experiment”

Join the first session of the Economics Research Seminar Series of Fall '21 featuring Adam Osman, assistant professor of economics at Urbana-Champaign, University of Illinois, who will present his work-in-progress on "Big Loans to Small Businesses: Predicting Winners and Losers in an Entrepreneurial Lending Experiment." 

Can radically larger loans help propel firm growth? Do certain entrepreneurial types prosper most under both constrained and less constrained settings? Using an experiment with an Egyptian lender, we find mostly null average effects from larger loans, but machine learning and psychometric data reveal a dramatic reversal of fortune. Within the control group, entrepreneurs we label “go-getters” perform better; however, go-getters have negative treatment effects from the larger loans, whereas non-go-getters prosper. This reversal is counter to credit officer expectations and has important implications for our understanding of capital markets, entrepreneurship talent, and credit expansion policy.

The event will be held physically in Meeting Room P022 (next to Bassily Auditorium) and online.

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