Ownership Networks Effects on Secured Borrowing

Constanza Martinez, Pavel Cizek, Carlos Leon Rincon

Research output: Working paperDiscussion paperOther research output

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Abstract

The secured borrowing based on sell/buy-backs agreements is studied,
specifically considering both: quantity and price. The empirical evidence
presented in this paper suggests that, after controlling for specific individual
characteristics, group-specific effects (defined by belonging or not to a financial
group) play a relevant role in this market. Using spatial panel data models, we
find that the amount of liquidity obtained with sell/buy-backs depend on
traditional determinants (institution’s size and financial leverage), but also, on the average size of the financial group to which the financial institution belongs.
Similarly, the borrowing cost depends on the amount of liquidity, but the average
profitability of the financial group is also significant. Our results are robust to
different relationship structures specified for financial groups.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages35
Volume2018-015
Publication statusPublished - 23 Apr 2018

Publication series

NameCentER Discussion Paper
Volume2018-015

Fingerprint

Buyback
Network effects
Ownership
Borrowing
Liquidity
Financial institutions
Financial leverage
Costs

Keywords

  • funding costs
  • short-term liquidity
  • spatial panel data models

Cite this

Martinez, C., Cizek, P., & Leon Rincon, C. (2018). Ownership Networks Effects on Secured Borrowing. (CentER Discussion Paper; Vol. 2018-015). Tilburg: CentER, Center for Economic Research.
Martinez, Constanza ; Cizek, Pavel ; Leon Rincon, Carlos. / Ownership Networks Effects on Secured Borrowing. Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper).
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Martinez, C, Cizek, P & Leon Rincon, C 2018 'Ownership Networks Effects on Secured Borrowing' CentER Discussion Paper, vol. 2018-015, CentER, Center for Economic Research, Tilburg.

Ownership Networks Effects on Secured Borrowing. / Martinez, Constanza; Cizek, Pavel; Leon Rincon, Carlos.

Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper; Vol. 2018-015).

Research output: Working paperDiscussion paperOther research output

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N2 - The secured borrowing based on sell/buy-backs agreements is studied,specifically considering both: quantity and price. The empirical evidencepresented in this paper suggests that, after controlling for specific individualcharacteristics, group-specific effects (defined by belonging or not to a financialgroup) play a relevant role in this market. Using spatial panel data models, wefind that the amount of liquidity obtained with sell/buy-backs depend ontraditional determinants (institution’s size and financial leverage), but also, on the average size of the financial group to which the financial institution belongs.Similarly, the borrowing cost depends on the amount of liquidity, but the averageprofitability of the financial group is also significant. Our results are robust todifferent relationship structures specified for financial groups.

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Martinez C, Cizek P, Leon Rincon C. Ownership Networks Effects on Secured Borrowing. Tilburg: CentER, Center for Economic Research. 2018 Apr 23. (CentER Discussion Paper).