In this paper we empirically test the recent lender-based theory for the use of collateral in bank lending. Based on a … borrowers and the lending branch of the bank to capture its information advantage and the magnitude of collateral … higher collateral requirements and lower interest rates. Moreover, competitive pressure from transaction lenders does not …

their activity and adopt a new technology. We show that firms' collateral and credit relationships ease firms' access to … credit and investment but can also inhibit firms' restructuring. When this occurs, negative collateral or productivity shocks … and the resulting drop in the price of collateral assets squeeze collateral-poor firms out of the credit market but foster …

wealth to satisfy collateral requirements and induce self-selecting contracts. In this setting, we view MLGSs as a wealth …