publication . Research . 2006

The determinants of loan contracts to business firms

Pham, Thi Thu Trà; Lensink, Robert;
Open Access English
  • Published: 01 Jan 2006
  • Publisher: Helsinki: The United Nations University World Institute for Development Economics Research (UNU-WIDER)
Abstract
This paper deals with loan contracting from a private bank in Vietnam. We focus on the main loan contract features that the bank uses in lending to business firms, namely loan maturity, collateral and loan interest rate. Based upon the simultaneous equation model of Dennis et al. (2000) and the bank’s loan contracting policies, we examine the possible interdependency of the three different loan contract terms. Also, we try to determine which firm characteristics and exogenous factors are relevant for loan contracts. We find strong interdependencies between these contract terms with significant bi-directional relationships between collateral and loan maturity, lo...
Subjects
Medical Subject Headings: health care economics and organizationseducation
free text keywords: G14, G21, C31, contract design, collateral, interest rate, maturity, Kreditgeschäft, Privatbank, Vietnam, ddc:330
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Research . 2006
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