EconPapers    
Economics at your fingertips  
 

Third-Party Loan Guarantees: Measuring Literacy and its Effect on Financial Decisions (Elisabeth Beckmann, Christa Hainz, Sarah Reiter)

Elisabeth Beckmann, Christa Hainz () and Sarah Reiter ()
Additional contact information
Sarah Reiter: Oesterreichische Nationalbank, Off-Site Supervision Division – Significant Institutions

Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)

Abstract: Granting a third-party guarantee for a loan does not directly involve a financial transaction. Therefore, guarantors might not understand that they are taking on a liability, albeit contingent. We introduce literacy about guarantees as a novel and distinct aspect of financial literacy. For ten Eastern European countries, we find that 45 percent of individuals lack this form of financial literacy. Instrumenting individual guarantee literacy with regional cohort-specific financial literacy, we show that guarantee literacy significantly reduces the probability of acting as a guarantor. Our results are robust to a placebo analysis and several sensitivity checks.

Keywords: Third-party loan guarantees; guarantee literacy; financial literacy; IV (search for similar items in EconPapers)
JEL-codes: D14 G51 G53 (search for similar items in EconPapers)
Pages: 55
Date: 2022-02-23
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.oenb.at/dam/jcr:2687ac16-958d-4ada-8cfc-745585c99d59/WP_237.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://www.oenb.at/dam/jcr:2687ac16-958d-4ada-8cfc-745585c99d59/WP_237.pdf [303 See Other]--> https://www.oenb.at/error_path/403.html?al_req_id=YyroJCRTYfKRo2IH0j1raQAAABs)

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:onb:oenbwp:237

Ordering information: This working paper can be ordered from
Oesterreichische Nationalbank, Economic Studies Division, POB 61, A-1011 Vienna, Austria

Access Statistics for this paper

More papers in Working Papers from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Markus Knell ().

 
Page updated 2022-09-23
Handle: RePEc:onb:oenbwp:237