外文文献原文Material Source: Hitotsubashi University Author: lichiro uesugiRole of collateral and personal guarantees in relationship lending: evidence from Japans SME loan market1 Introduction A key issue of interest in the recent literature on financial intermediation has been the role of relationship lending. Relationship lending is particularly common in the case of small business lending, because small businesses typically rely on bank loans for a substantial part of their financing needs but also tend to be informationally opaque. An important issue in this context is the use of collateral, which is a common feature of loan contracts between small firms and banks around the world, and a number of theoretical and empirical studies have examined why it is so widespread and how it relates to the incentives for borrowers and lenders and the borrower-lender relationship. For instance, it has been argued that in the presence of information asymmetries between creditors and borrowers, collateral may mitigate the problem of adverse selection (Bester, 1985; 1987) and/or the problem of moral hazard (Bester, 1994; Boot, Thakor, and Udell, 1991). Collateral also affects the incentives of creditors, who will use it either as a substitute for (Manove, Padilla, and Pagano, 2001) or complement to (Rajan and Winton, 1995; Boot 2000; Longhofer and Santos, 2000) screening and monitoring efforts. Another aspect of collateral that studies have concentrated on is that its presence may depend on the length and intimacy of the relationship between creditors and borrowers (Boot, 2000; Boot and Thakor, 1994; Sharpe, 1990). Existing empirical research has yet to reach decisive conclusions about the nature of these relationships. This paper seeks to contribute to the existing literature on collateral using a unique firm-level data set of the small and medium sized enterprise (SME) loan market in Japan. Explicitly differentiating physical collateral (such as real estate) and personal guarantees by business representatives, we investigate how the use of collateral and personal guarantees affects the incentives of borrowers, lenders, and the relationship between them. More specifically, we examine the following three issues. First, we examine whether riskier borrowers are more likely to be required to provide collateral or personal guarantees. Second, we investigate how collateral and personal guarantees affect banks monitoring of borrowers. Third, we examine the correlation between the use of collateral and personal guarantees on the one hand and the closeness of borrower-lender relationships on the other. The data set we employ is based mainly on the “Survey of the Financial Environment” (SFE) conducted by the Small and Medium Enterprise Agency of Japan in October 2002. In order to focus on firms that mostly depend on bank loans for their financing, we limit the sample to firms satisfying the legal definition of an SME in Japan. We then combine the SFE data for each SME with information on their main bank obtained from the banks financial statements in order to control for lender characteristics as well. Furthermore, to control for the effect of government credit guarantees on collateral and personal guarantees, in the main analysis of this paper we exclude from the sample all firms that enjoyed any form of government credit guarantee. As a result of this screening process, we end up with a sample of 1,702 firms. Our main findings can be summarized as follows. We find that firms riskiness does not have a significant effect on the likelihood that collateral is used. Thus, we cannot find firm evidence that the use of collateral mitigates moral hazard. We find, however, that banks whose claims are collateralized monitor borrowers more intensively, and that borrowers who have a long-term relationship with their main bank are more likely to pledge collateral. These findings suggest that collateral is complementary to relationship lending. In contrast, the complementarity between relationship lending and personal guarantees is weaker.As far as we know, this is the first empirical study that systematically examines the role of collateral and personal guarantees in Japans SME loan market. The two main contributions of the paper are as follows. First, given that Japan is generally considered to have a relationship-based financial system in which the relationship-lender, the main bank, plays a central role in corporate financing (Rajan and Zingales, 2003), the study helps to improve our understanding of the role of collateral in relationship lending and complements existing studies that focus on the United States and Europe. Second, and more importantly, by distinguishing collateral and personal guarantees, the study detects an important role of collateral in relationship lending that has not been remarked on much before. As we argue below, although a typical SME in Japan has a l