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

Lawrence G. Goldberg, Andrea Heuson

Research output: Contribution to journalArticle

4 Citations (Scopus)

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 languageEnglish (US)
Pages (from-to)49-60
Number of pages12
JournalJournal of Financial Services Research
Volume6
Issue number1
DOIs
StatePublished - May 1 1992

Fingerprint

Market characteristics
Financing
Proportion
Income
Credit
Empirical study
Factors
Lending
Loans
Loan rates
Costs
Risk characteristics

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

Fixed versus variable rate financing : The influence of borrower, lender, and market characteristics. / Goldberg, Lawrence G.; Heuson, Andrea.

In: Journal of Financial Services Research, Vol. 6, No. 1, 01.05.1992, p. 49-60.

Research output: Contribution to journalArticle

@article{6ab546bc643941efa5e7f07f33839ec4,
title = "Fixed versus variable rate financing: The influence of borrower, lender, and market characteristics",
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.",
author = "Goldberg, {Lawrence G.} and Andrea Heuson",
year = "1992",
month = "5",
day = "1",
doi = "10.1007/BF01046117",
language = "English (US)",
volume = "6",
pages = "49--60",
journal = "Journal of Financial Services Research",
issn = "0920-8550",
publisher = "Springer Netherlands",
number = "1",

}

TY - JOUR

T1 - Fixed versus variable rate financing

T2 - The influence of borrower, lender, and market characteristics

AU - Goldberg, Lawrence G.

AU - Heuson, Andrea

PY - 1992/5/1

Y1 - 1992/5/1

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=0042148916&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0042148916&partnerID=8YFLogxK

U2 - 10.1007/BF01046117

DO - 10.1007/BF01046117

M3 - Article

AN - SCOPUS:0042148916

VL - 6

SP - 49

EP - 60

JO - Journal of Financial Services Research

JF - Journal of Financial Services Research

SN - 0920-8550

IS - 1

ER -