The Cross-Country Magnitude and Determinants of Collateral Borrowing
Using the World Bank Enterprise Survey covering 6,800 firms across 43 developing countries, this paper investigates the prevalence and determinants of collateralized borrowing. It focuses on the following two aspects: (1) whether firms' loans...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/03/15949444/cross-country-magnitude-determinants-collateral-borrowing http://hdl.handle.net/10986/19878 |
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okr-10986-19878 |
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| recordtype |
oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO CREDIT ACCESS TO FINANCE ACCESSIBILITY ACCOUNT RECEIVABLE ACCOUNTS RECEIVABLE AMOUNT OF COLLATERAL AMOUNT OF LOAN ASSET PRICES ASSET VALUE AVAILABILITY OF CREDIT BANK LENDING BANK LOAN BANK POLICY BANK RISK BANKING SECTOR BANKS BOND BOND RATINGS BONDS BORROWER BORROWING BORROWING CAPACITY BUSINESS CYCLE BUSINESS INVESTMENT CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKETS CASH FLOW CHECKS CLAIM COLLATERAL COLLATERAL AMOUNT COLLATERAL REQUIREMENT COLLATERALIZATION COMMERCIAL BANKS CORPORATE FINANCE CORPORATE INVESTMENT CORRUPTION COUNTRY DUMMIES COUNTRY FIXED EFFECT COUNTRY FIXED EFFECTS CREDIT BUREAU CREDIT CONSTRAINT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT MARKET CREDIT RATINGS CREDIT RATIONING CREDIT REGISTRY CREDIT SCORES CREDIT UNIONS CREDIT WORTHINESS CREDITORS DEBT DEBT CAPACITY DEBTORS DEBTS DEFAULT RISK DEFAULTS DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DIVIDEND DIVIDEND PAYOUTS DOMESTIC BANK DOMESTIC CREDIT DOMESTIC MARKET DUMMY VARIABLE ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT EMPLOYMENT EQUIPMENT EQUITIES EQUITY SECURITIES ESTATE PROPERTIES EXPORTER EXPORTERS EXTERNAL FINANCE EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCE COMPANIES FINANCIAL ASSETS FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FACTORS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARY FINANCIAL OBSTACLES FINANCIAL RESOURCES FINANCIAL STATEMENT FINANCIAL STUDIES FINANCING CONSTRAINT FINANCING CONSTRAINTS FINANCING OBSTACLES FINANCING SOURCES FIRM GROWTH FOREIGN FIRM FORMAL BANKS FORMAL FINANCIAL INSTITUTIONS FORMAL LENDING GOVERNANCE INDICATORS HOUSEHOLDS ILLIQUIDITY INCOME INCOME LEVELS INDUSTRIAL LOANS INFORMAL BORROWING INFORMAL FINANCE INFORMAL LENDERS INFORMATION ASYMMETRIES INFORMATION ASYMMETRY INSIDER TRADING INSTRUMENT INTEREST RATE INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL FINANCIAL CRISES INVENTORIES JOINT VENTURE LACK OF ASSETS LACK OF COLLATERAL LARGE FIRMS LEGAL SYSTEM LEGAL SYSTEM EFFICIENCY LENDER LENDERS LENDING DECISIONS LENDING INSTITUTIONS LEVERAGE LINE OF CREDIT LINES OF CREDIT LIQUIDATION LIQUIDATION COST LIQUIDITY CONSTRAINTS LIQUIDITY CRUNCH LOAN LOAN CHARACTERISTICS LOAN QUALITY MACROECONOMICS MARKET DEVELOPMENT MICROFINANCE MICROFINANCE INSTITUTIONS MONETARY POLICY MORTGAGE MORTGAGE CREDIT NEGATIVE SHOCKS NONBANK INSTITUTIONS OUTPUT OVERDRAFT OVERDRAFT FACILITIES OVERDRAFT FACILITY PERSONAL ASSET PERSONAL ASSETS PLEDGE COLLATERAL PORTFOLIO PORTFOLIO CONSTRAINTS PRIVATE BANK PRIVATE BANKS PRIVATE COMMERCIAL BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAU PROBABILITY OF DEFAULT PUBLIC BANKS PUBLIC CREDIT PUBLIC ENTERPRISES REAL ESTATE RECESSIONS REPAYMENT REPUTATION RETURN RULE OF LAW SAVINGS SAVINGS DEPOSITS SECURITIES SHAREHOLDER SMALL FIRM FINANCE SPECIFIC ASSETS STATE BANK STATE BANKS STOCK MARKET STOCK MARKET DEVELOPMENT STOCKS TAXATION TRADE CREDITS VALUABLE ASSETS VALUE OF COLLATERAL VOLATILITY WORLD DEVELOPMENT INDICATOR |
| spellingShingle |
ACCESS TO CREDIT ACCESS TO FINANCE ACCESSIBILITY ACCOUNT RECEIVABLE ACCOUNTS RECEIVABLE AMOUNT OF COLLATERAL AMOUNT OF LOAN ASSET PRICES ASSET VALUE AVAILABILITY OF CREDIT BANK LENDING BANK LOAN BANK POLICY BANK RISK BANKING SECTOR BANKS BOND BOND RATINGS BONDS BORROWER BORROWING BORROWING CAPACITY BUSINESS CYCLE BUSINESS INVESTMENT CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKETS CASH FLOW CHECKS CLAIM COLLATERAL COLLATERAL AMOUNT COLLATERAL REQUIREMENT COLLATERALIZATION COMMERCIAL BANKS CORPORATE FINANCE CORPORATE INVESTMENT CORRUPTION COUNTRY DUMMIES COUNTRY FIXED EFFECT COUNTRY FIXED EFFECTS CREDIT BUREAU CREDIT CONSTRAINT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT MARKET CREDIT RATINGS CREDIT RATIONING CREDIT REGISTRY CREDIT SCORES CREDIT UNIONS CREDIT WORTHINESS CREDITORS DEBT DEBT CAPACITY DEBTORS DEBTS DEFAULT RISK DEFAULTS DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DIVIDEND DIVIDEND PAYOUTS DOMESTIC BANK DOMESTIC CREDIT DOMESTIC MARKET DUMMY VARIABLE ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT EMPLOYMENT EQUIPMENT EQUITIES EQUITY SECURITIES ESTATE PROPERTIES EXPORTER EXPORTERS EXTERNAL FINANCE EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCE COMPANIES FINANCIAL ASSETS FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FACTORS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARY FINANCIAL OBSTACLES FINANCIAL RESOURCES FINANCIAL STATEMENT FINANCIAL STUDIES FINANCING CONSTRAINT FINANCING CONSTRAINTS FINANCING OBSTACLES FINANCING SOURCES FIRM GROWTH FOREIGN FIRM FORMAL BANKS FORMAL FINANCIAL INSTITUTIONS FORMAL LENDING GOVERNANCE INDICATORS HOUSEHOLDS ILLIQUIDITY INCOME INCOME LEVELS INDUSTRIAL LOANS INFORMAL BORROWING INFORMAL FINANCE INFORMAL LENDERS INFORMATION ASYMMETRIES INFORMATION ASYMMETRY INSIDER TRADING INSTRUMENT INTEREST RATE INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL FINANCIAL CRISES INVENTORIES JOINT VENTURE LACK OF ASSETS LACK OF COLLATERAL LARGE FIRMS LEGAL SYSTEM LEGAL SYSTEM EFFICIENCY LENDER LENDERS LENDING DECISIONS LENDING INSTITUTIONS LEVERAGE LINE OF CREDIT LINES OF CREDIT LIQUIDATION LIQUIDATION COST LIQUIDITY CONSTRAINTS LIQUIDITY CRUNCH LOAN LOAN CHARACTERISTICS LOAN QUALITY MACROECONOMICS MARKET DEVELOPMENT MICROFINANCE MICROFINANCE INSTITUTIONS MONETARY POLICY MORTGAGE MORTGAGE CREDIT NEGATIVE SHOCKS NONBANK INSTITUTIONS OUTPUT OVERDRAFT OVERDRAFT FACILITIES OVERDRAFT FACILITY PERSONAL ASSET PERSONAL ASSETS PLEDGE COLLATERAL PORTFOLIO PORTFOLIO CONSTRAINTS PRIVATE BANK PRIVATE BANKS PRIVATE COMMERCIAL BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAU PROBABILITY OF DEFAULT PUBLIC BANKS PUBLIC CREDIT PUBLIC ENTERPRISES REAL ESTATE RECESSIONS REPAYMENT REPUTATION RETURN RULE OF LAW SAVINGS SAVINGS DEPOSITS SECURITIES SHAREHOLDER SMALL FIRM FINANCE SPECIFIC ASSETS STATE BANK STATE BANKS STOCK MARKET STOCK MARKET DEVELOPMENT STOCKS TAXATION TRADE CREDITS VALUABLE ASSETS VALUE OF COLLATERAL VOLATILITY WORLD DEVELOPMENT INDICATOR Nguyen, Ha Qian, Rong The Cross-Country Magnitude and Determinants of Collateral Borrowing |
| relation |
Policy Research Working Paper;No. 6001 |
| description |
Using the World Bank Enterprise Survey
covering 6,800 firms across 43 developing countries, this
paper investigates the prevalence and determinants of
collateralized borrowing. It focuses on the following two
aspects: (1) whether firms' loans from financial
institutions require collateral (the extensive margin) and
(2) the collateral value relative to the loan value (the
intensive margin). On the first aspect, it finds that
collateral borrowing is prevalent. On average, 73 percent of
loans from financial institutions require collateral. Firms
that are small or sell domestically are significantly less
likely to pledge collateral. Shorter loans and loans from
non-bank financial institutions are also less often
associated with collateral. On the second aspect, it finds
that on average the loan value is at least 72 percent of the
collateral value. The only robust and significant
determinants of the collateral value are the type of assets
used for collateral. The analysis also checks whether
countries' income and institutions affect
collateralized borrowing. It finds that firms in countries
with higher income and better institutions and credit
information are significantly less likely to pledge
collateral. These factors, however, have little impact on
collateral values. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Nguyen, Ha Qian, Rong |
| author_facet |
Nguyen, Ha Qian, Rong |
| author_sort |
Nguyen, Ha |
| title |
The Cross-Country Magnitude and Determinants of Collateral Borrowing |
| title_short |
The Cross-Country Magnitude and Determinants of Collateral Borrowing |
| title_full |
The Cross-Country Magnitude and Determinants of Collateral Borrowing |
| title_fullStr |
The Cross-Country Magnitude and Determinants of Collateral Borrowing |
| title_full_unstemmed |
The Cross-Country Magnitude and Determinants of Collateral Borrowing |
| title_sort |
cross-country magnitude and determinants of collateral borrowing |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2012/03/15949444/cross-country-magnitude-determinants-collateral-borrowing http://hdl.handle.net/10986/19878 |
| _version_ |
1764444007684898816 |
| spelling |
okr-10986-198782021-06-14T10:32:51Z The Cross-Country Magnitude and Determinants of Collateral Borrowing Nguyen, Ha Qian, Rong ACCESS TO CREDIT ACCESS TO FINANCE ACCESSIBILITY ACCOUNT RECEIVABLE ACCOUNTS RECEIVABLE AMOUNT OF COLLATERAL AMOUNT OF LOAN ASSET PRICES ASSET VALUE AVAILABILITY OF CREDIT BANK LENDING BANK LOAN BANK POLICY BANK RISK BANKING SECTOR BANKS BOND BOND RATINGS BONDS BORROWER BORROWING BORROWING CAPACITY BUSINESS CYCLE BUSINESS INVESTMENT CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKETS CASH FLOW CHECKS CLAIM COLLATERAL COLLATERAL AMOUNT COLLATERAL REQUIREMENT COLLATERALIZATION COMMERCIAL BANKS CORPORATE FINANCE CORPORATE INVESTMENT CORRUPTION COUNTRY DUMMIES COUNTRY FIXED EFFECT COUNTRY FIXED EFFECTS CREDIT BUREAU CREDIT CONSTRAINT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT MARKET CREDIT RATINGS CREDIT RATIONING CREDIT REGISTRY CREDIT SCORES CREDIT UNIONS CREDIT WORTHINESS CREDITORS DEBT DEBT CAPACITY DEBTORS DEBTS DEFAULT RISK DEFAULTS DEPENDENT DEPOSIT DEPOSITS DEVELOPING COUNTRIES DIVIDEND DIVIDEND PAYOUTS DOMESTIC BANK DOMESTIC CREDIT DOMESTIC MARKET DUMMY VARIABLE ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT EMPLOYMENT EQUIPMENT EQUITIES EQUITY SECURITIES ESTATE PROPERTIES EXPORTER EXPORTERS EXTERNAL FINANCE EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCE COMPANIES FINANCIAL ASSETS FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FACTORS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARY FINANCIAL OBSTACLES FINANCIAL RESOURCES FINANCIAL STATEMENT FINANCIAL STUDIES FINANCING CONSTRAINT FINANCING CONSTRAINTS FINANCING OBSTACLES FINANCING SOURCES FIRM GROWTH FOREIGN FIRM FORMAL BANKS FORMAL FINANCIAL INSTITUTIONS FORMAL LENDING GOVERNANCE INDICATORS HOUSEHOLDS ILLIQUIDITY INCOME INCOME LEVELS INDUSTRIAL LOANS INFORMAL BORROWING INFORMAL FINANCE INFORMAL LENDERS INFORMATION ASYMMETRIES INFORMATION ASYMMETRY INSIDER TRADING INSTRUMENT INTEREST RATE INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL FINANCIAL CRISES INVENTORIES JOINT VENTURE LACK OF ASSETS LACK OF COLLATERAL LARGE FIRMS LEGAL SYSTEM LEGAL SYSTEM EFFICIENCY LENDER LENDERS LENDING DECISIONS LENDING INSTITUTIONS LEVERAGE LINE OF CREDIT LINES OF CREDIT LIQUIDATION LIQUIDATION COST LIQUIDITY CONSTRAINTS LIQUIDITY CRUNCH LOAN LOAN CHARACTERISTICS LOAN QUALITY MACROECONOMICS MARKET DEVELOPMENT MICROFINANCE MICROFINANCE INSTITUTIONS MONETARY POLICY MORTGAGE MORTGAGE CREDIT NEGATIVE SHOCKS NONBANK INSTITUTIONS OUTPUT OVERDRAFT OVERDRAFT FACILITIES OVERDRAFT FACILITY PERSONAL ASSET PERSONAL ASSETS PLEDGE COLLATERAL PORTFOLIO PORTFOLIO CONSTRAINTS PRIVATE BANK PRIVATE BANKS PRIVATE COMMERCIAL BANKS PRIVATE CREDIT PRIVATE CREDIT BUREAU PROBABILITY OF DEFAULT PUBLIC BANKS PUBLIC CREDIT PUBLIC ENTERPRISES REAL ESTATE RECESSIONS REPAYMENT REPUTATION RETURN RULE OF LAW SAVINGS SAVINGS DEPOSITS SECURITIES SHAREHOLDER SMALL FIRM FINANCE SPECIFIC ASSETS STATE BANK STATE BANKS STOCK MARKET STOCK MARKET DEVELOPMENT STOCKS TAXATION TRADE CREDITS VALUABLE ASSETS VALUE OF COLLATERAL VOLATILITY WORLD DEVELOPMENT INDICATOR Using the World Bank Enterprise Survey covering 6,800 firms across 43 developing countries, this paper investigates the prevalence and determinants of collateralized borrowing. It focuses on the following two aspects: (1) whether firms' loans from financial institutions require collateral (the extensive margin) and (2) the collateral value relative to the loan value (the intensive margin). On the first aspect, it finds that collateral borrowing is prevalent. On average, 73 percent of loans from financial institutions require collateral. Firms that are small or sell domestically are significantly less likely to pledge collateral. Shorter loans and loans from non-bank financial institutions are also less often associated with collateral. On the second aspect, it finds that on average the loan value is at least 72 percent of the collateral value. The only robust and significant determinants of the collateral value are the type of assets used for collateral. The analysis also checks whether countries' income and institutions affect collateralized borrowing. It finds that firms in countries with higher income and better institutions and credit information are significantly less likely to pledge collateral. These factors, however, have little impact on collateral values. 2014-08-29T18:52:46Z 2014-08-29T18:52:46Z 2012-03 http://documents.worldbank.org/curated/en/2012/03/15949444/cross-country-magnitude-determinants-collateral-borrowing http://hdl.handle.net/10986/19878 English en_US Policy Research Working Paper;No. 6001 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |