What Determines Collection Rates of Debt Collection Agencies?

21 Pages Posted: 7 Apr 2017

See all articles by Timo Beck

Timo Beck

University of Tuebingen

Jens Grunert

University of Tuebingen - Department of Banking

Werner Neus

Universitaet Tuebingen - Department of Banking

Andreas Walter

University of Giessen - Department of Financial Services

Date Written: May 2017

Abstract

We contribute to the literature on debt collection agencies in two ways: First, we present an estimation of the collection rates. The distribution of collection rates exhibits a mean of about 65% and a strong bimodality with peaks at the very ends of the distribution. Second, we investigate potential determinants of the collection success. We find that collection rates are positively related to the exposure at default and to prior debtor‐specific collection rates. In contrast, the age of the account and—if applicable—prior experience with the debtor have a negative impact on collection rates.

Keywords: debt collection agency, collection rate

JEL Classification: G21, G30

Suggested Citation

Beck, Timo and Grunert, Jens and Neus, Werner and Walter, Andreas, What Determines Collection Rates of Debt Collection Agencies? (May 2017). Financial Review, Vol. 52, Issue 2, pp. 259-279, 2017, Available at SSRN: https://ssrn.com/abstract=2946536 or http://dx.doi.org/10.1111/fire.12131

Timo Beck (Contact Author)

University of Tuebingen ( email )

Wilhelmstr. 19
72074 Tuebingen, Baden Wuerttemberg 72074
Germany

Jens Grunert

University of Tuebingen - Department of Banking ( email )

Mohlstrasse 36
D - 72074 Tuebingen
Germany

Werner Neus

Universitaet Tuebingen - Department of Banking ( email )

Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany

Andreas Walter

University of Giessen - Department of Financial Services ( email )

Betriebswirtschaftslehre V
Giessen, 35394
Germany

HOME PAGE: http://wiwi.uni-giessen.de/ma/dat/walter/Andreas_Walter/

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