Fraud and Abuse in the PPP? Evidence from Investment Advisory Firms

Beggs, William; Harvison, Thuong

doi:10.2139/ssrn.3647606

Cited by 5 publications

(2 citation statements)

References 20 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Kapinos (2021a) documents that counties with larger PPP exposure actually experienced a decline in economic activity, as the program allowed businesses to remain closed longer. Further research examines fraud during the program, exploring a variety of methods used by borrowers to defraud the program (Bailey et al, 2021;Beggs and Harvison 2021).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Lender financial reporting incentives and loan prioritization during the Paycheck Protection Program

Bailey

Sokolowski

2022

View full text Add to dashboard Cite

PurposeThis study contributes to a growing body of literature on the Paycheck Protection Program (PPP) by examining how lender incentives affected prioritization of large borrowers. In addition, this study separately examines incentives for commercial banks and credit unions during the program.Design/methodology/approachUsing 2020 PPP loan data, the authors create a proxy for lender loan prioritization by comparing the skewness statistics of large and small loan distributions. A regression model is used to examine lender reporting incentives and loan prioritization.FindingsResults show that larger borrowers were prioritized in receiving PPP loans earlier. Lenders with financial reporting concerns and commercial banks favored large borrowers to a greater extent.Practical implicationsThis study may inform social planners and regulators about the benefits and costs of delegating emergency funding loan decisions to financial institutions.Originality/valueThe authors believe this paper is the first to examine financial institution reporting incentives in relationship to PPP lending practices. It adds novelty by examining lender incentives, while prior research has focused heavily on the economic consequences of the program and how borrower–lender relationships affected loan practices during the program.

show abstract

Section: Introductionmentioning

confidence: 99%

“…Further research examines fraud during the program, exploring a variety of methods used by borrowers to defraud the program (Bailey et al. , 2021; Beggs and Harvison 2021).…”

Section: Introductionmentioning

confidence: 99%