An Empirical Investigation of Reputation Loan Size Dynamics in Rural Credit Markets in Honduras

Sundaram Stukel, Reka and Bradford L. Barham
Additional contact information
Sundaram Stukel, Reka: U of Wisconsin

Staff Paper Series from University of Wisconsin, Agricultural and Applied Economics

Abstract: This paper examines the role of two types of reputation - borrower credit history and productivity - in disequilibrium supply and demand models of loan size dynamics in formal and informal credit markets. Using panel data on Honduran households, full- and partialinformation regime switching econometric models yield four principal findings: (1) credit contracts in the formal sector are largely collateral driven and not reputation driven; (2) the informal sector credit contracts are borrower reputation based; (3) the informal sector utilizes positive/negative credit histories in both markets to credibly reward/punish borrowers; and (4) technical efficiency has a positive impact in determining loan size in both sectors on the demand and supply side of the market.

Date: 2007-12
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.aae.wisc.edu/pubs/sps/pdf/stpap520.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.aae.wisc.edu/pubs/sps/pdf/stpap520.pdf [301 Moved Permanently]--> https://aae.wisc.edu/pubs/sps/pdf/stpap520.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:wisagr:520

Access Statistics for this paper

More papers in Staff Paper Series from University of Wisconsin, Agricultural and Applied Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().