Munich Personal RePEc Archive

Collateral Constraints and Legal Protection of Lenders: A Macroeconomic Perspective

Kunieda, Takuma and Shibata, Akihisa (2011): Collateral Constraints and Legal Protection of Lenders: A Macroeconomic Perspective.

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Abstract

We identify countries that establish collateral-based lending systems with a small-open-economy version of Nobuhiro Kiyotaki and John Moore’s (1997) model. We find that 47 countries in 1980s and 48 countries in 1990s out of 98 countries establish collateral-based lending systems. We also investigate the origin of collateral-based lending systems and find that if a country offers good legal protection for lenders, then a collateral-based lending system is more likely to be embedded in that country.

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