UNR NevadaNews, NV
04-12-06
Kilkenny earns acclaim for credit market insight
Story by: Heather Shallenberger
Maureen Kilkenny, associate professor of resource economics, will be
presented with an award from the American Agricultural Economics Association
for her article co-authored with Bob Jolly at Iowa State University, "Are Rural
Credit Markets Competitive? Is There Room for Competition in Rural Credit
Markets?” at the American Agricultural Economics Association meeting July 2326 in Long Beach, Calif. The article was selected from among 50 others to
represent the Outstanding Choices Article for 2005 by the magazine’s editorial
group and advisory board.
“I think the criteria for outstanding includes being correct, interesting, timely, and
useful,” Kilkenny said. “One way to measure the last criterion is to count users.
Our issue appears to have been downloaded many times more often than any
other article ever published by Choices.”
Not only did the article receive the highest number of user hits in the magazine’s
history, but it also has become a popular source of information for many
noteworthy users such as the United States Department of Agriculture (USDA),
the House of Representatives, the Farm Credit System, as well as thousands of
users from Canada, Europe, Asia and Australia.
Kilkenny joined the College of Agriculture, Biotechnology, and Natural Resources
in July 2005 after leaving Iowa State University where her work focused on
economic geography
“I came to the University of Nevada because the Resource Economics
department faculty in the College of Agriculture are some of the best researchers
in the world,” Kilkenny said. “They are well-known and moreover, they are a real
pleasure to work with.”
Kilkenny’s choice to investigate rural credits markets was sparked by a
conversation she had with rural citizens who asked why young adults were
unable to receive business loans to start their first business and stay in their rural
towns.
"I asked if they had any idea why,” Kilkenny said. “They basically said they
thought the money they deposited in branched banks was lent to big city
borrowers instead of locally.
“Because there had never been any documentation that showed geographically
where bank deposits came from and were loans went to,” Kilkenny explained.
“Who really knew for sure?”
Kilkenny wrote the question into a research project to conduct a “Geography of
Rural Financial Intermediation” survey and analysis and was awarded $165,000
by the USDA's National Research Initiative grants program. She worked with
bankers, community development groups, the Federal Reserve, and Bankers'
Associations in five midwestern states.
“It turns out that it is not true that small town deposits are lent out far away,”
Kilkenny said. “Instead, the safest and most profitable loans a banker can make
are loans to borrowers in his own locality who are known, trusted, and
accountable.
“The rural citizens who asked the original question were really pleased to learn
these answers,” Kilkenny said. “And so were the bankers.”
The research also pinpointed Midwestern counties that might benefit from a local
bank and improve the region’s economic opportunities.
“A town without a bank has a hard time growing,” Kilkenny said. “So my main
motivation in writing the article was to improve rural access to credit and to
support rural economic development.”
Kilkenny is busy with a number of other projects, including building analytical
models of the Truckee Meadows area to investigate fiscal interdependencies and
investigating why plants that process agricultural produce are in cities, not rural
towns.
“We need to know why businesses open where they do,” Kilkenny explained. “So
that our federal and state governments can target rural business and industry
development funding more effectively.”