fundamental risk. This effect is separate from the liquidation externality caused by fire sales of seized collateral upon default …

This theoretical paper explores the effects of costly and non-costly collateral on moral hazard, when collateral value … may fluctuate. Given that all collateral is costly, stochastic collateral will entail the same positive incentive effects … as nonstochastic collateral, provided the variation in collateral value is modest. If it is large, the incentive effects …

In his basic model of debt renegotiation, Bester (1994) argues that collateral is more effective if high risk projects … high probability of default, that makes collateral more effective. Instead it turns out that, given the expected return …, the probability of default has no impact on the collateral's effective-ness. Moreover, an increasing risk of the project …

foreign lenders consider loans from domestic lenders as firm collateral. This implies that their lending supply is positively … associated with the volume of capital a firm is able to borrow from domestic lenders (collateral effect). On the other hand, the … supply (competition effect). Two different cases are then possible. If foreign lenders are able, in spite of the collateral …

factors when they decide whether to grant loans: the relationship factor, the financial statement factor, and the collateral …/guarantee factor. We also find that smaller banks place greater emphasis on the relationship and the collateral/guarantee factors, and …

This paper analyses the factors that characterize the collateral loans in Chile. Such analysis is motivated by the … importance of the credit access for businesses survival and the value that has the ability to pledge collateral as a mechanism to … pledge collateral on loans in Chile. In addition, since Chile is a country with an emerging economy, the results are compared …

We explore the determinants of liquidation values of collateral, focusing on the potential buyers of assets. When a fi … and risk-shifting in loan contracts. Our contribution reveals that collateral does not necessarily solve for the asset …