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Identifier to cite or link to this item: https://hdl.handle.net/10086/15728

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Title	The Role of Collateral and Personal Guarantees in Relationship Lending: Evidence from Japan's SME Loan Market
Creator	Creator Name Ono, Arito Ono, Arito 小野, 有人小野, 有人オノ, アリトオノ, アリト Affiliation Affiliation Name Mizuho Research Institute Ltd.
Creator	Creator Name Uesugi, Iichiro Uesugi, Iichiro 植杉, 威一郎植杉, 威一郎ウエスギ, イイチロウウエスギ, イイチロウ Affiliation Affiliation Name Hitotsubashi University
Editor	Contributor Name 世代間問題研究プロジェクト（世代間問題の経済分析） = Economic Analysis of Intergenerational Issues, Project on Intergenerational Equity
Editor	Contributor Name 一橋大学経済研究所世代間問題研究機構 = Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University
Key Word	collateral
	personal guarantees
	relationship lending
	SME
JEL	D82
	G21
	G30
Abstract	This paper investigates the determinants of the use of collateral and personal guarantees in, Japan's SME loan market. We find that firms' riskiness does not have a significant effect on the, likelihood that collateral is used. We find, however, that main banks whose claims are collateralized, monitor borrowers more intensively, and that borrowers who have a long-term relationship with, their main banks are more likely to pledge collateral. These findings are consistent with the theory, that the use of collateral is effective in raising the bank's seniority and enhances its screening and, monitoring. This incentive effect for the bank becomes tenuous for personal guarantees.
Description	This draft: March 2008; First draft: August 2006
Publisher	Institute of Economic Research, Hitotsubashi University
Issued Date	2008-04
Language	English(eng)
Resource Type	technical report
Version Type	VoR
Is Part OfRelation -	Related Title PIE/CIS Discussion Paper ; No. 371
Number of Pages	37
Sponsorship	科学研究費補助金（特別推進研究） = Grant-in-Aid for Specially Promoted Research
Appears in Collections	PIE/CIS Discussion paper
URL	https://hdl.handle.net/10086/15728