Collateral and Adverse Selection in Transition Countries

Laurent Weill and Christophe Godlewski

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: This paper tackles the question of knowing whether collateral helps solve adverse selection problems in transition countries. We use a unique dataset of about 400 bank loans from 16 transition countries. Our findings support the view of a positive link between the presence of collateral and the risk premium, which is in accordance with the observed-risk hypothesis. This suggests that collateral does not mitigate adverse selection problems in transition countries.

Keywords: Bank; collateral; transition economies. (search for similar items in EconPapers)
JEL-codes: G21 P20 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Collateral and Adverse Selection in Transition Countries (2009)
Working Paper: Collateral and Adverse Selection in Transition Countries (2009)
Working Paper: Collateral and adverse selection in transition countries (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2008-10

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