Loan collateral decisions and corporate borrowing costs

Journal of Money, Credit and Banking

Volumn 38, Issue 1, 2006, Pages 67-90

  Booth, James R ^a   Booth, Lena Chua ^b  

^a ARIZONA STATE UNIVERSITY   (United States)

^b Garvin School of International Management ^*  (United States)

Author keywords

Borrowing costs; Costly contracting; Cross monitoring; Generalized bank monitoring; Loan collateral; Selectivity bias

Indexed keywords

EID: 33644764139     PISSN: 00222879     EISSN: None     Source Type: Journal    
DOI: 10.1353/mcb.2006.0011     Document Type: Article

References (22)

1. Adler, B. (1993). "An Equity Agency Solution to the Bankruptcy Priority Puzzle." Journal of Legal Studies 22, 73-98.
2. Berger, A., and G. Udell (1990). "Collateral, Loan Quality and Bank Risk." Journal of Monetary Economics 25, 21-42.
3. Berger, A., and G. Udell (1995). "Relationship Lending and Lines of Credit in Small Firm Finance." Journal of Business 68, 351-381.
4. Besanko, D., and A. Thakor (1987a). "Collateral and Rationing: Sorting Equilibria in Monopolistic and Competitive Credit Markets." International Economic Review 28, 671-689.
5. Besanko, D., and A. Thakor (1987b). "Competitive Equilibrium in the Credit Market Under Asymmetric Information." The Journal of Economic Theory 42, 167-182.
6. Bester, H. (1985). "Screening vs. Rationing in Credit Markets with Imperfect Information." American Economic Review 75, 850-855.
7. Booth, J. (1992). "Contract Costs, Bank Loans, and the Cross-Monitoring Hypothesis." Journal of Financial Economics 31, 21-35.
8. Carey, M. (1996). "Financial Covenants, Private Debt, and Financial Intermediation." Working Paper, Board of Governors of the Federal Reserve System.
9. Carey, M., M. Post, and S.A. Sharpe (1998). "Does Corporate Lending by Banks and Finance Companies Differ? Evidence on Specialization in Private Debt Contracting." Journal of Finance 53, 845-878.
10. Chan, Y., and G. Kanatas (1985). "Asymmetric Valuation and the Role of Collateral in Loan Agreements." Journal of Money, Credit and Banking 17, 85-95.
11. Heckman, J. (1976). "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models." The Annals of Economic and Social Measurement 5, 475-492.
12. Hubbard, R.G., K.N. Kuttner, and D.N. Palia (2002). "Are There Bank Effects in Borrowers' Cost of Funds? Evidence from a Matched Sample of Borrowers and Banks." Journal of Business 75, 559-581.
13. Lee, L. (1978). "Unionism and Wage Rates: A Simultaneous Equation Model with Qualitative and Limited Dependent Variables." International Economic Review 19, 415-433.
14. Leeth, J., and J. Scott (1989). "The Incidence of Secured Debt: Evidence from the Small Business Community." Journal of Financial and Quantitative Analysis 24, 379-394.
15. Mann, R. (1997). "Explainting the Pattern of Secured Credit." Harvard Law Review, 628-629.
16. Ranjan, R., and A. Winton (1995). "Covenants and Collateral as Incentives to Monitor." Journal of Finance 50, 1113-1146.
17. Smith, C. (1980). "On the Theory of Financial Contracting: The Personal Loan Market." Journal of Monetary Economics 6, 333-357.
18. Smith, C., and J. Warner (1979a). "Bankruptcy, Secured Debt and Optimal Capital Structure: Comment." Journal of Finance 34, 247-251.
19. Smith, C., and J. Warner (1979b). "On Financial Contracting: An Analysis of Bond Covenants." Journal of Financial Economics 7, 1979, 117-161.
20. Strahan, P.E. (1999). "Borrower Risk and the Price and Non-Price Terms of Bank Loans." Staff report #90, Federal Reserve Bank of New York.
21. Stulz, R., and H. Johnson (1985). "An Analysis of Secured Debt." Journal of Financial Economics 14, 501-522.
22. White, Halbert (1980). "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity." Econometrica 48, 817-838.