The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs
Autor(a) principal: | |
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Data de Publicação: | 2011 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.6/3022 |
Resumo: | This study investigates how the use of collateral affects the incentives of borrowers, lenders and the relationship between them in loan pricing. Using the UK Survey of Small and Medium-Sized Enterprises 2008, the results from a simultaneous equation approach show that high quality borrowers choose a contract with more collateral and lower interest rate, suggesting that collateral acts as an incentive device to adverse selection problem in credit markets. By distinguish business and personal collateral the findings suggest that personal collateral seems to be more effective in acting as a sorting device in line with screening models. Regarding the nature borrower-lender relationship the results also show a substitution effect between relationship length and collateral requirements from the main bank. But the main bank uses explicit loan interest rate as a loss leader to secure long-term rents on relationship business, suggesting that inter-temporal shifting rents is possible. |
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The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEsRacionamento de créditoPME -- Relacionamento bancárioThis study investigates how the use of collateral affects the incentives of borrowers, lenders and the relationship between them in loan pricing. Using the UK Survey of Small and Medium-Sized Enterprises 2008, the results from a simultaneous equation approach show that high quality borrowers choose a contract with more collateral and lower interest rate, suggesting that collateral acts as an incentive device to adverse selection problem in credit markets. By distinguish business and personal collateral the findings suggest that personal collateral seems to be more effective in acting as a sorting device in line with screening models. Regarding the nature borrower-lender relationship the results also show a substitution effect between relationship length and collateral requirements from the main bank. But the main bank uses explicit loan interest rate as a loss leader to secure long-term rents on relationship business, suggesting that inter-temporal shifting rents is possible.Gama, Ana Paula Bernardino MatiasuBibliorumDuarte, Fábio Dias2015-02-10T18:43:36Z20112011-102011-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.6/3022enginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-12-15T09:39:17Zoai:ubibliorum.ubi.pt:10400.6/3022Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T00:44:33.758246Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
title |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
spellingShingle |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs Duarte, Fábio Dias Racionamento de crédito PME -- Relacionamento bancário |
title_short |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
title_full |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
title_fullStr |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
title_full_unstemmed |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
title_sort |
The role of collateral and relationship lending in loan pricing: evidence from United Kingdom SMEs |
author |
Duarte, Fábio Dias |
author_facet |
Duarte, Fábio Dias |
author_role |
author |
dc.contributor.none.fl_str_mv |
Gama, Ana Paula Bernardino Matias uBibliorum |
dc.contributor.author.fl_str_mv |
Duarte, Fábio Dias |
dc.subject.por.fl_str_mv |
Racionamento de crédito PME -- Relacionamento bancário |
topic |
Racionamento de crédito PME -- Relacionamento bancário |
description |
This study investigates how the use of collateral affects the incentives of borrowers, lenders and the relationship between them in loan pricing. Using the UK Survey of Small and Medium-Sized Enterprises 2008, the results from a simultaneous equation approach show that high quality borrowers choose a contract with more collateral and lower interest rate, suggesting that collateral acts as an incentive device to adverse selection problem in credit markets. By distinguish business and personal collateral the findings suggest that personal collateral seems to be more effective in acting as a sorting device in line with screening models. Regarding the nature borrower-lender relationship the results also show a substitution effect between relationship length and collateral requirements from the main bank. But the main bank uses explicit loan interest rate as a loss leader to secure long-term rents on relationship business, suggesting that inter-temporal shifting rents is possible. |
publishDate |
2011 |
dc.date.none.fl_str_mv |
2011 2011-10 2011-01-01T00:00:00Z 2015-02-10T18:43:36Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.6/3022 |
url |
http://hdl.handle.net/10400.6/3022 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799136342781722624 |