haku: @journal_id 1385 / yhteensä: 458
viite: 13 / 458
| Tekijä: | Fabbri, D. Padula, M. |
| Otsikko: | Does poor legal enforcement make households credit-constrained? |
| Lehti: | Journal of Banking and Finance
2004 : OCT, VOL. 28:10, p. 2369-2397 |
| Asiasana: | Credit markets Borrowing Loans Legislation Models Italy |
| Kieli: | eng |
| Tiivistelmä: | This paper analyzes the relation btw. the quality of the legal enforcement of loan contracts and the allocation of credit (hereafter as: cr.) to households (here as: h-hold/h-holds), both theoretically and empirically. A model of h-hold cr. market with secured debt contracts is used. The model shows that the working of the judicial (here as: jdcl.) system affects both the probability of being credit-constrained (here as: cr-cnd.) and the equilibrium amount of debt. In the empirical part, the predictions are tested using data on Italian h-holds and on the performance of Italian jdcl. districts. It is documented that an increment in the backlog of trials pending has a statistically and economically significant positive effect on the h-hold probability of being turned down for credit. In addition, it is shown that moving a h-hold from the high-cost jdcl. district to the low-cost jdcl. one would reduce his probability of being cr-cnd. by 50 percent on average, other things being equal. |
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