Journal of Financial Economics Vol. 81 No. 2 2006
Determinants of collateral☆
Abstract
We estimate a comprehensive model of the determinants of collateral in loans extended to business firms. We use a panel data on a sample of bank loans to Spanish firms from 1984 to 2002. Consistent with theories that view collateral as a solution to adverse selection problems, our results provide direct evidence of a negative association between collateral and a borrower's risk. We also present evidence on previously unexplored determinants of collateral such as credit market competition, lender type, and the business cycle.
- DOI
- 10.1016/j.jfineco.2005.06.003
- Volume
- 81
- Issue
- 2
- Pages
- 255-281
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref