Economic impact of a private sector micro-financing scheme in South Dakota
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While poverty rates on Native American Indian reservations are triple the US average. Small business incubation programs, available elsewhere in the US, scarcely exist on the Native American Indian Reservations (NAIRs). Our unique study tests the effects of the Lakota Fund (LF), a private sector small business development initiative on the Pine Ridge Reservation in South Dakota, on the economic development of the NAIRs. Our objective is to determine whether the SBA-like programs (loans, training, and consulting) can improve economic conditions. The 1980–2006 annual county-level (Shannon Co. is ‘treatment,’and Todd Co. is ‘control’) data are a natural experiment. Results indicate that the LF inception and duration significantly raised real per capita income (RPCI)—suggesting not only the success of the LF, but support for the broader notion that privately funded small business initiatives can be used to support economic development of isolated impoverished groups within the US economy.
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- Economic impact of a private sector micro-financing scheme in South Dakota
Small Business Economics
Volume 36, Issue 2 , pp 157-168
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Economic development
- Lakota fund
- Native American Indian reservations
- Small business incubation
- Industry Sectors
- Author Affiliations
- 1. Department of Economics, Duke University, 138 Social Sciences Building, Box 90097, Durham, NC, 27713, USA
- 2. Department of Economics, University of Memphis, 400BB (The FCBE), Memphis, TN, 38152, USA
- 3. Department of Economics, University of Memphis, 450BB (The FCBE), Memphis, TN, 38152, USA
- 4. Department of Economics, Middlebury College, Warner Hall 502F, Middlebury, VT, 05753, USA
- 5. IZA (Institute for the Study of Labor), Bonn, Germany