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that banks require collateral from observably riskier borrowers (lender selection effect), while lower risk premiums arise …
Persistent link: https://www.econbiz.de/10010292211
, primarily by community banks. The survey evidence suggests that the use of credit scores in small business lending by community … banks is surprisingly widespread. Moreover, the scores employed tend to be the consumer credit scores of the small business …
Persistent link: https://www.econbiz.de/10010292213
An important theoretical literature motivates collateral as a mechanism that mitigates adverse selection, credit rationing, and other inefficiencies that arise when borrowers hold ex ante private information. There is no clear empirical evidence regarding the central implication of this...
Persistent link: https://www.econbiz.de/10010292292
Collateral is a widely used, but not well understood, debt-contracting feature. Two broad strands of theoretical literature explain collateral as arising from the existence of either ex ante private information or ex post incentive problems between borrowers and lenders. However, the extant...
Persistent link: https://www.econbiz.de/10010292349
U.S. commercial banks are increasingly using credit scoring models to underwrite small business credits. This paper …
Persistent link: https://www.econbiz.de/10010397703
of the relative health of community banks on economic growth and investigating potential transmission mechanisms for … market shares and higher efficiency rankings for small, private, domestically owned banks are associated with better economic … performance, and that the marginal benefits of larger shares are greater when the banks are more efficient.Only mixed support is …
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