Fixed versus variable rate financing: The influence of borrower, lender, and market characteristics

Lawrence G. Goldberg; Andrea J. Heuson

doi:10.1007/BF01046117

Fixed versus variable rate financing: The influence of borrower, lender, and market characteristics

Lawrence G. Goldberg, Andrea J. Heuson

Finance

Research output: Contribution to journal › Article

4 Scopus citations

Abstract

Previous research has analyzed the problem faced by borrowers who must choose between fixed rate and variable rate loans when each loan carries different cost and risk characteristics and the borrowers face various income and employment prospects. In addition, the existing literature contains theoretical and empirical studies of how lenders react when given the ability to offer both fixed and variable rate financing. This article unifies the two strands of research to develop and test a model of the equilibrium proportion of variable rate lending. Results indicate that factors related to borrower, lender, and market characteristics are significant determinants of the equilibrium proportion of variable rate credit originated.

Original language	English (US)
Pages (from-to)	49-60
Number of pages	12
Journal	Journal of Financial Services Research
Volume	6
Issue number	1
DOIs	https://doi.org/10.1007/BF01046117
State	Published - May 1 1992

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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Goldberg, L. G., & Heuson, A. J. (1992). Fixed versus variable rate financing: The influence of borrower, lender, and market characteristics. Journal of Financial Services Research, 6(1), 49-60. https://doi.org/10.1007/BF01046117

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