Hainz, Christa
[Verfasser:in]
;
Weill, Laurent
[Sonstige Person, Familie und Körperschaft];
Godlewski, Christophe J.
[Sonstige Person, Familie und Körperschaft]
Erschienen in:Bank of Finland Research Discussion Paper ; No. 27/2008
Umfang:
1 Online-Ressource (40 p)
Sprache:
Nicht zu entscheiden
DOI:
10.2139/ssrn.1316379
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December, 15 2008 erstellt
Beschreibung:
We investigate the impact of bank competition on the use of collateral in loan contracts. We develop a theoretical model incorporating information asymmetries in a spatial competition framework where banks choose between screening the borrower and asking for collateral. We show that presence of collateral is more likely when bank competition is low. We then test this prediction empirically on a sample of bank loans from 70 countries. We estimate logit models where the presence of collateral is regressed on bank competition, measured by the Lerner index. Our empirical tests corroborate the theoretical predictions that bank competition reduces the use of collateral. These findings survive several robustness checks