Electronic Resource
Oxford, UK; Malden, USA
:
Blackwell Publishing Ltd/Inc.
Journal of business finance & accounting
32 (2005), S. 0
ISSN:
1468-5957
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
Abstract: In this first ever study to examine the marginal importance of collateral level vis-à-vis reputation in reducing information asymmetry, we find using unique data for UK business credit, that pre-existing reputation is the single-most important determinant in inducing a bank to extend a loan. Moreover, a bank responds positively to higher levels of collateral and negatively to higher credit requests. Similar to Cole (1998), but controlling for collateral level, we find that it helps to have banked with the lender before. Non-trivial information search costs imply an important role for reputation in extending credits.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.0306-686X.2005.00599.x
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