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THE RATIONING PROCESS IN THE INTERNATIONAL LOAN

THE RATIONING PROCESS IN THE INTERNATIONAL LOAN This study examines the pricing of international bank loans to LDCs as a group to ascertain if nonprice variables are dominant factors in granting these loans. Specifically, it attempts to test the hypothesis that banks, in extending Eurocredits to LDCs, have used credit rationing, rather than pricing, maturity or other variables, to respond to the perceived risks involved in such lending. Results of empirical tests for the period 197790 confirm that, in response to significantly higher perceived risks, lenders simply constrained the flow of credit to this group of countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Commerce and Management Emerald Publishing

THE RATIONING PROCESS IN THE INTERNATIONAL LOAN

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1056-9219
DOI
10.1108/eb060310
Publisher site
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Abstract

This study examines the pricing of international bank loans to LDCs as a group to ascertain if nonprice variables are dominant factors in granting these loans. Specifically, it attempts to test the hypothesis that banks, in extending Eurocredits to LDCs, have used credit rationing, rather than pricing, maturity or other variables, to respond to the perceived risks involved in such lending. Results of empirical tests for the period 197790 confirm that, in response to significantly higher perceived risks, lenders simply constrained the flow of credit to this group of countries.

Journal

International Journal of Commerce and Management – Emerald Publishing

Published: Mar 1, 1992

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