Bank Interest Margins and Business Start-up Collateral: Testing for Convexity

Arbeitspapier

The paper investigates the relationship between bank interest rate margins and collateral for loans issued to new ventures. The analysis finds a convex U-shaped relationship. The results indicate that while provision of collateral initially reduces bank exposure to risk (through security, more optimal levels of capital and lower moral hazard among entrepreneurs) that beyond a point the positive risk-wealth association gives rise to greater risk taking propensity among entrepreneurs and ultimately higher interest rates. This indicates that a lender's pricing policy may even somewhat help to level the competitive playing field between ventures launched by higher and moderately wealthy entrepreneurs

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Papers on Entrepreneurship, Growth and Public Policy ; No. 4504

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: asymetric information ; bank lendig ; credit constraints ; Kreditgeschäft ; Unternehmensgründung ; Zinsspannenrechnung ; Kreditsicherung ; Asymmetrische Information ; Verschuldungsrestriktion ; Großbritannien

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Burke, Andrew E. ; Hanley, Aoife
• Ereignis: Veröffentlichung
• (wer): Max Planck Institute for Research into Economic Systems
• (wo): Jena
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/19990
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ