Paying back to borrow more: Reputation and bank credit access in early America
The birth of commercial banking in New England after the American Revolution provides an important case to examine banking development under asymmetric information. Similar to credit markets in developing countries today, bank borrowers of early America usually had little or no collateral. This paper uses a unique data set based on loans between 1803 and 1833 for Plymouth Bank to examine bank lending policies in the absence of collateral. Empirical evidence suggests that borrowers with little collateral established their credit-worthiness through repeated interaction with banks.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rothenberg, Winifred B., 1979. "A Price Index for Rural Massachusetts, 1750–1855," The Journal of Economic History, Cambridge University Press, vol. 39(04), pages 975-1001, December.
- Eugene White, 1999.
"California Banking in the Nineteenth Century: The Art and Method of the Bank of A. Levy,"
Departmental Working Papers
199905, Rutgers University, Department of Economics.
- Eugene N. White, 1999. "California Banking in the Nineteenth Century: The Art and Method of the Bank of A. Levy," NBER Working Papers 7187, National Bureau of Economic Research, Inc.
- Bodenhorn, Howard, 2003.
" Short-Term Loans and Long-Term Relationships: Relationship Lending in Early America,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 35(4), pages 485-505, August.
- Howard Bodenhorn, 2001. "Short-Term Loans and Long-Term Relationships: Relationship Lending in Early America," NBER Historical Working Papers 0137, National Bureau of Economic Research, Inc.
- Besley, Timothy, 1995.
"Savings, credit and insurance,"
Handbook of Development Economics,
in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 36, pages 2123-2207
- Douglas W. Diamond, 1998.
"Reputation Acquisition in Debt Markets,"
Levine's Working Paper Archive
602, David K. Levine.
- Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
- Adams, Donald R., 1972. "The Bank of Stephen Girard, 1812–1831," The Journal of Economic History, Cambridge University Press, vol. 32(04), pages 841-868, December.
- Davis, Lance E., 1960. "The New England Textile Mills and the Capital Markets: A Study of Industrial Borrowing 1840–1860," The Journal of Economic History, Cambridge University Press, vol. 20(01), pages 1-30, March.
- Boot, Arnoud W A & Thakor, Anjan V, 1994. "Moral Hazard and Secured Lending in an Infinitely Repeated Credit Market Game," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(4), pages 899-920, November.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Petersen, Mitchell A & Rajan, Raghuram G, 1995.
"The Effect of Credit Market Competition on Lending Relationships,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(2), pages 407-43, May.
- Mitchell A. Petersen & Raghuram G. Rajan, 1994. "The Effect of Credit Market Competition on Lending Relationships," NBER Working Papers 4921, National Bureau of Economic Research, Inc.
- Martinelli, Cesar, 1997. "Small firms, borrowing constraints, and reputation," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 91-105, May.
- repec:cup:cbooks:9780521812375 is not listed on IDEAS
- Bodenhorn, Howard, 2007. "Usury ceilings and bank lending behavior: Evidence from nineteenth century New York," Explorations in Economic History, Elsevier, vol. 44(2), pages 179-202, April.
- Beatriz Armendáriz de Aghion & Jonathan Morduch, 2000. "Microfinance Beyond Group Lending," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 401-420, July.
- W. Bentley MacLeod, 2007. "Reputations, Relationships, and Contract Enforcement," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 595-628, September.
- Berger, Allen N & Udell, Gregory F, 1995. "Relationship Lending and Lines of Credit in Small Firm Finance," The Journal of Business, University of Chicago Press, vol. 68(3), pages 351-81, July.
- Naomi R. Lamoreaux, 1994. "Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England," NBER Books, National Bureau of Economic Research, Inc, number lamo94-1, December.
When requesting a correction, please mention this item's handle: RePEc:eee:exehis:v:45:y:2008:i:4:p:477-488. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.