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2021•Applied Economics LettersRequires access

A credit rationing model of the medium risk borrowers with low valued collateral

Sehoon Kwon

Open publisher page 2 citations

Abstract

This paper investigates how the risk and the collateral values are jointly affecting the credit rationing. We propose a credit rationing model of continuous default risk and collateral values and show that the medium risk borrowers with low valued (or high transaction cost) collateral are most vulnerable to the credit rationing.

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What this paper is about

This paper investigates how the risk and the collateral values are jointly affecting the credit rationing. We propose a credit rationing model of continuous default risk and collateral values and show that the medium risk borrowers with low valued (or high transaction cost) collateral are most vulnerable to the credit rationing.

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OpenAlex reports 2 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

This paper investigates how the risk and the collateral values are jointly affecting the credit rationing. We propose a credit rationing model of continuous default risk and collateral values and show that the medium risk borrowers with low valued (or high transaction cost) collateral are most vulnerable to the credit rationing.

Key concepts: Collateral, Credit rationing, Rationing, Credit risk, Business, Transaction cost, Database transaction, Economics

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