Small businesses and government assistance during COVID-19: Evidence from the paycheck protection program in the U.S

ABSTRACT

The COVID-19 pandemic has caused unprecedented losses for small businesses in cities across the globe. Policymakers have relied on a wide range of measures to support firms and sustain business continuity. However, significant concerns have been expressed about the degree of equity in the distribution and efficiency of government assistance during the pandemic disruption. Drawing on the case of the Paycheck Protection Program (PPP) and its implementation in inland Southern California, this study examines the spatial distribution of PPP loans at the neighborhood level. Based on spatial regressions and in-depth interviews with small businesses, banks, government agencies, and nonprofit organizations, the study finds that, in terms of their total number and value, the PPP loans have roughly succeeded in reaching their small business targets. However, communities with higher shares of pandemic-vulnerable businesses or higher levels of socioeconomic vulnerability are less likely to have received PPP loans. There have also been spatial spillover effects of community vulnerability when it comes to receiving PPP loans at the neighborhood level. The correlation between fewer PPP loans and community vulnerability also reflects both short-term needs and longstanding challenges facing entrepreneurship and business development in socioeconomically disadvantaged communities. Moreover, small business resilience and community resilience are inseparable, and thus government business assistance must be considered in the context of local communities. [ABSTRACT FROM AUTHOR] Copyright of Environment & Planning A is the property of Sage Publications Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)