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A Quantitative Theory of the Credit Score

Chatterjee, Satyajit - 2020

What is the role of credit scores in credit markets? We argue that it is a stand in for a market assessment of a person's unobservable type (which here we take to be patience). We pose a model of persistent hidden types where observable actions shape the public assessment of a person's type via...

Persistent link: https://www.econbiz.de/10012481219

Searching for Approval

Agarwal, Sumit - 2020

We study the interaction of search and application approval in credit markets. We combine a unique dataset, which details search behavior for a large sample of mortgage borrowers, with loan application and rejection decisions. Our data reveal substantial dispersion in mortgage rates and search...

Persistent link: https://www.econbiz.de/10012481535

Information-Based Pricing in Specialized Lending

Blickle, Kristian; He, Zhiguo; Huang, Jing; Parlatore, … - National Bureau of Economic Research - 2024

We study specialized lending in a credit market competition model with private information. Two banks, equipped with similar data processing systems, possess "general" signals regarding the borrower's quality. However, the specialized bank gains an additional advantage through further...

Persistent link: https://www.econbiz.de/10014486246

Information Acquisition and Rating Agencies

Cole, Harold L.; Cooley, Thomas F. - National Bureau of Economic Research - 2023

For decades credit rating agencies were viewed as trusted arbiters of creditworthiness and their ratings as important tools for managing risk. The common narrative is that the value of ratings was compromised by the evolution of the industry to a form where issuers pay for ratings. In this paper...

Persistent link: https://www.econbiz.de/10014322691

Screening Peers Softly : Inferring the Quality of Small Borrowers

Iyer, Rajkamal - 2009

The recent banking crisis highlights the challenges faced in credit intermediation. New online peer-to-peer lending markets offer opportunities to examine lending models that primarily cater to small borrowers and that generate more types of information on which to screen. This paper evaluates...

Persistent link: https://www.econbiz.de/10012463407

Bankruptcy and Small Firms' Access to Credit

Berkowitz, Jeremy - 2002

In this paper, we investigate how personal bankruptcy law affects small firms' access to credit. When a firm is unincorporated, its debts are personal liabilities of the firm's owner, so that lending to the firm is legally equivalent to lending to its owner. If the firm fails, the owner has an...

Persistent link: https://www.econbiz.de/10012469703

Big Loans to Small Businesses : Predicting Winners and Losers in an Entrepreneurial Lending Experiment

Bryan, Gharad; Karlan, Dean; Osman, Adam - National Bureau of Economic Research - 2021

We experimentally study the impact of substantially larger enterprise loans, in collaboration with an Egyptian lender. Larger loans generate small average impacts, but machine learning using psychometric data reveals dramatic heterogeneity. Top-performers (i.e., those with the highest predicted...

Persistent link: https://www.econbiz.de/10012629531

Economic Growth and Bank Innovation

Gorton, Gary; He, Ping - National Bureau of Economic Research - 2021

since the mid-1930s when banks invented the term loan. Concurrently, bank innovation first involved the invention of credit … analysis and covenant design. Later, bank innovation included the advent of loan sales, increased loan syndications, the … calibrate a model of bank innovation to determine the quantitative contribution of bank innovation to economic growth …

Persistent link: https://www.econbiz.de/10012660004

Dynamic R&D Choice and the Impact of the Firm's Financial Strength

Peters, Bettina - 2016

This article investigates how a firm's financial strength affects its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from...

Persistent link: https://www.econbiz.de/10012456639

The Financing of R&D and Innovation

Hall, Bronwyn H. - 2009

Evidence on the "funding gap" for investment innovation is surveyed. The focus is on financial market reasons for …

Persistent link: https://www.econbiz.de/10012463325

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