Category

Number of Access this item:848（2024-04-23 20:45 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/10086/27314

Link to primary information 

File Format Size Views Description
cover_27314 pdf
wp021 pdf 445 KB 1,140

Item Information

Output File

Title
Collateral and Local Lending: Testing the Lender-Based Theory
Creator
Creator Name
Bellucci, Andrea Bellucci, Andrea
Affiliation
Affiliation Name
University of Tubingen
Creator Name
Borisov, Alexander Borisov, Alexander
Affiliation
Affiliation Name
University of Cincinnati
Creator Name
Giombini, Germana Giombini, Germana
Affiliation
Affiliation Name
University of Urbino
Affiliation
Affiliation Name
MoFiR
Creator Name
Zazzaro, Alberto Zazzaro, Alberto
Affiliation
Affiliation Name
Polytechnic University of Marche
Affiliation
Affiliation Name
CSEF
Key Word
Distance
Collateral
Interest Rate
Bank lending
JEL
G21
G32
L11
Abstract
In this paper we empirically test the recent lender-based theory for the use of collateral in bank lending. Based on a proprietary dataset of loan contracts written by a local bank in competitive credit markets, we use the physical proximity between borrowers and the lending branch of the bank to capture its information advantage and the magnitude of collateral-related transaction costs. Overall, our results seem more consistent with several classic borrower-based explanations rather than with the lender-based view. We show that, conditional on obtaining credit from the local bank, more distant borrowers experience higher collateral requirements and lower interest rates. Moreover, competitive pressure from transaction lenders does not magnify the importance of lender-to-borrower distance. Our findings are also obtained with estimation techniques that allow for endogenous loan contract terms and joint determination of collateral and interest rates.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2015-06
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
HIT-REFINED Working Paper Series ; No. 21
Relation
Related Identifier
URI
  http://www.ier.hit-u.ac.jp/hit-refined/
Number of Pages
40
Sponsorship
基盤研究(S) = Grants-in-Aid for Scientific Research (S)
Appears in Collections
Working Paper Series / Real Estate Markets, Financial Crisis, and Economic Growth An Integrated Economic Approach
URL
https://hdl.handle.net/10086/27314