Abstract

http://ssrn.com/abstract=1650617
 
 

References (23)



 


 



Do Local Capital Market Conditions Affect Consumers' Borrowing Decisions?


Alexander W. Butler


Rice University - Jesse H. Jones Graduate School of Business

Jess Cornaggia


Georgetown University

Umit G. Gurun


University of Texas at Dallas - Naveen Jindal School of Management

December 1, 2014

Management Science, Forthcoming

Abstract:     
This paper uses detailed data from an online peer-to-peer lending intermediary to test whether local access to finance affects consumers’ willingness to pay for loans. After controlling for local economic conditions and borrower credit quality, we find that borrowers who reside in areas with good access to bank finance request loans with lower interest rates. This effect is stronger for borrowers with poor credit and those seeking small loans, suggesting that local access to finance is more important for marginal borrowers. Overall, our findings shed light on how consumers substitute between alternative sources of finance.

Number of Pages in PDF File: 33

Keywords: Peer-to-peer, Access to finance, Bank competition, Finance-growth nexus, Consumer finance, Household finance


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Date posted: July 29, 2010 ; Last revised: March 13, 2015

Suggested Citation

Butler, Alexander W. and Cornaggia, Jess and Gurun, Umit G., Do Local Capital Market Conditions Affect Consumers' Borrowing Decisions? (December 1, 2014). Management Science, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1650617 or http://dx.doi.org/10.2139/ssrn.1650617

Contact Information

Alexander W. Butler
Rice University - Jesse H. Jones Graduate School of Business ( email )
MS 531
Houston, TX 77005
United States
713-348-6341 (Phone)
HOME PAGE: http://www.owlnet.rice.edu/~awbutler/
Jess Cornaggia (Contact Author)
Georgetown University ( email )
3700 O Street, NW
Washington, DC 20057
United States
HOME PAGE: http://www.jesscornaggia.com
Umit G. Gurun
University of Texas at Dallas - Naveen Jindal School of Management ( email )
P.O. Box 830688
Richardson, TX 75083-0688
United States
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