Qian, RongNguyen, Ha2014-08-292014-08-292012-03https://hdl.handle.net/10986/19878Using 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.en-USCC BY 3.0 IGOACCESS TO CREDITACCESS TO FINANCEACCESSIBILITYACCOUNT RECEIVABLEACCOUNTS RECEIVABLEAMOUNT OF COLLATERALAMOUNT OF LOANASSET PRICESASSET VALUEAVAILABILITY OF CREDITBANK LENDINGBANK LOANBANK POLICYBANK RISKBANKING SECTORBANKSBONDBOND RATINGSBONDSBORROWERBORROWINGBORROWING CAPACITYBUSINESS CYCLEBUSINESS INVESTMENTCAPITAL FLOWSCAPITAL INFLOWSCAPITAL MARKETSCASH FLOWCHECKSCLAIMCOLLATERALCOLLATERAL AMOUNTCOLLATERAL REQUIREMENTCOLLATERALIZATIONCOMMERCIAL BANKSCORPORATE FINANCECORPORATE INVESTMENTCORRUPTIONCOUNTRY DUMMIESCOUNTRY FIXED EFFECTCOUNTRY FIXED EFFECTSCREDIT BUREAUCREDIT CONSTRAINTCREDIT CONSTRAINTSCREDIT COOPERATIVECREDIT COOPERATIVESCREDIT INFORMATIONCREDIT INFORMATION SYSTEMCREDIT MARKETCREDIT RATINGSCREDIT RATIONINGCREDIT REGISTRYCREDIT SCORESCREDIT UNIONSCREDIT WORTHINESSCREDITORSDEBTDEBT CAPACITYDEBTORSDEBTSDEFAULT RISKDEFAULTSDEPENDENTDEPOSITDEPOSITSDEVELOPING COUNTRIESDIVIDENDDIVIDEND PAYOUTSDOMESTIC BANKDOMESTIC CREDITDOMESTIC MARKETDUMMY VARIABLEECONOMIC ACTIVITYECONOMIC CRISISECONOMIC DEVELOPMENTEMPLOYMENTEQUIPMENTEQUITIESEQUITY SECURITIESESTATE PROPERTIESEXPORTEREXPORTERSEXTERNAL FINANCEEXTERNALITIESFEDERAL RESERVEFEDERAL RESERVE BANKFINANCE COMPANIESFINANCIAL ASSETSFINANCIAL CONSTRAINTSFINANCIAL CRISESFINANCIAL DEVELOPMENTFINANCIAL FACTORSFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARYFINANCIAL OBSTACLESFINANCIAL RESOURCESFINANCIAL STATEMENTFINANCIAL STUDIESFINANCING CONSTRAINTFINANCING CONSTRAINTSFINANCING OBSTACLESFINANCING SOURCESFIRM GROWTHFOREIGN FIRMFORMAL BANKSFORMAL FINANCIAL INSTITUTIONSFORMAL LENDINGGOVERNANCE INDICATORSHOUSEHOLDSILLIQUIDITYINCOMEINCOME LEVELSINDUSTRIAL LOANSINFORMAL BORROWINGINFORMAL FINANCEINFORMAL LENDERSINFORMATION ASYMMETRIESINFORMATION ASYMMETRYINSIDER TRADINGINSTRUMENTINTEREST RATEINTEREST RATE SPREADINTERNATIONAL BANKINTERNATIONAL FINANCIAL CRISESINVENTORIESJOINT VENTURELACK OF ASSETSLACK OF COLLATERALLARGE FIRMSLEGAL SYSTEMLEGAL SYSTEM EFFICIENCYLENDERLENDERSLENDING DECISIONSLENDING INSTITUTIONSLEVERAGELINE OF CREDITLINES OF CREDITLIQUIDATIONLIQUIDATION COSTLIQUIDITY CONSTRAINTSLIQUIDITY CRUNCHLOANLOAN CHARACTERISTICSLOAN QUALITYMACROECONOMICSMARKET DEVELOPMENTMICROFINANCEMICROFINANCE INSTITUTIONSMONETARY POLICYMORTGAGEMORTGAGE CREDITNEGATIVE SHOCKSNONBANK INSTITUTIONSOUTPUTOVERDRAFTOVERDRAFT FACILITIESOVERDRAFT FACILITYPERSONAL ASSETPERSONAL ASSETSPLEDGE COLLATERALPORTFOLIOPORTFOLIO CONSTRAINTSPRIVATE BANKPRIVATE BANKSPRIVATE COMMERCIAL BANKSPRIVATE CREDITPRIVATE CREDIT BUREAUPROBABILITY OF DEFAULTPUBLIC BANKSPUBLIC CREDITPUBLIC ENTERPRISESREAL ESTATERECESSIONSREPAYMENTREPUTATIONRETURNRULE OF LAWSAVINGSSAVINGS DEPOSITSSECURITIESSHAREHOLDERSMALL FIRM FINANCESPECIFIC ASSETSSTATE BANKSTATE BANKSSTOCK MARKETSTOCK MARKET DEVELOPMENTSTOCKSTAXATIONTRADE CREDITSVALUABLE ASSETSVALUE OF COLLATERALVOLATILITYWORLD DEVELOPMENT INDICATOR10.1596/1813-9450-6001