Credit access for high-risk borrowers in financially concentrated markets: Do SBA loan guarantees help?

The Small Business Administration's (SBA) loan guarantee program was established to correct financial capital market inefficiencies and improve small business access to financial capital. However, the SBA loan guarantee program has been criticized for its failure to improve the performance of financial capital markets available to small businesses. This study considers the financial capital market failure created by lenders' monopoly power (specifically, financial market concentration) in financial capital markets. Based on this potential market failure, a model is derived to evaluate the behavior of lenders and borrowers in financial capital markets. Using the national Survey of Small Business Finance, this study compares the financial characteristics of small business borrowers with and without SBA loan guarantees, and provides a qualitative assessment of the SBA's ability to correct financial capital market inefficiencies. When considering only the interaction between borrower quality and the degree of financial market concentration, high-risk borrowers in high concentration financial markets have a higher probability of receiving an SBA loan guarantee than low-risk borrowers in low concentration financial markets. However, when other factors influencing the demand for financial capital are included in the model, only the borrower attributes (credit risk and age) are significant. While the SBA loan guarantee program appears to partially mitigate the effects of the market failure caused by financial market concentration for high-risk borrowers, the program appears to be better designed to address borrower risk, rather than credit market failure.     

Coercion in the selling of credit life insurance

Credit life insurance, which repays some or all of a borrower's outstanding debt in the event of death, has been a controversial subject for many years. Critics assert that, despite regulations that limit tied sales, pressure on loan officers to generate fee income through cross selling creates an incentive for coercion of borrowers. Allegedly, some sales techniques leave the consumer with the false impression that the purchase of credit insurance was necessary to obtain the loan. This article measures the frequency with which creditor efforts to sell credit insurance transform the sales message from persuasive to coercive. A methodology is developed for measuring the impact of coercive selling pressure applied to borrowers at the point of sale. Data used to measure the effect of coercive pressure are taken from an extensive survey of borrowers conducted during 1993. Not only are public policy concerns about coercion in the selling of credit insurance addressed, but more generally the article offers a methodology to quantify the influence of the customer's point-of-sale experience on the decision to purchase any financial service. © 1995 John Wiley & Sons, Inc.     

The CEO endorser and message source credibility: an empirical investigation of antecedents and consequences

This article investigates the antecedents and consequences of source credibility within the context of the relatively new but growing phenomenon of Chief Executive Officer (CEO) endorsers. The study results indicate that source credibility is a central determinant of a CEO endorsers' ability to effect desired outcome states. Results also indicate that the effect of message source credibility on purchase intentions, though strong, is not direct because beliefs about critical product attributes mediate the effect of a message source's credibility on behavioural intentions. The results of the study also indicate that models of source credibility derived from the celebrity endorser literature do not generalize to the CEO endorser context. Specifically, the attractiveness and expertise of the message source had no significant impact on receivers' perceptions of credibility.     

The effect of service quality on trust and commitment varying across generations

We examine the effect of service quality on consumer trust and commitment in the context of obtaining a financial loan and how these relationships vary across different generational cohorts. We find that the service quality offered by a loan officer has a significant effect on consumer trust towards a financial institution, which in turn influences consumer commitment to a financial institution for a future transaction. We also find that relative strengths of a few paths in the model differ across different age cohorts, indicating some generational variability in the relationship between service quality, trust and commitment.     

Small business loan securitization and interstate risk sharing

Do credit risk transfers in general, and loan sales and securitizations in particular, by financial institutions enhance credit availability and financial stability? Or do they allow assets of poor credit quality to spread to unprotected investors, and thus create financial crises and destroy values? In this paper, we contribute to the continuing debate by examining the effect of small business loan securitizations on interstate personal income insurance. Using data of U.S. banks for the period 1995–2008, we find that small business loans securitizations contribute to the smoothening of state personal income volatility, and that this contribution is stronger in states where small businesses play a more important role in the local economy.     

From Firm-Controlled to Consumer-Contributed: Consumer Co-Production of Personal Media Marketing Communication

Fueled by the sociocultural shift from firm-controlled to consumer-contributed media, the researchers explore the idea of adapting a co-production strategy from service marketing to marketing communication sent to personal media. Eleven field experiments with firms, along with a structural model tested on survey data, provide empirical evidence supporting a co-production approach applied as a communication strategy in the context of a text message mobile coupon marketing campaign. The results demonstrate a co-produced direct marketing communication strategy that increases attitude toward the communication, purchase intent, and purchase activity, while also acting as a risk-reducing mechanism. Furthermore, perceived customization of the communication interacts strongly with risk perception and marginally with coupon proneness as related to attitude toward the communication when marketers enter the world of consumers' personal media. A push versus pull framework and a co-produced communication framework are put forth to suggest various areas marketers can make available for consumers to co-produce in a marketing communication exchange.     

Commitment lending under asymmetric information: Theory and tests on U.K. startup data

U.K. business startup data is used to examine the role of contract parameters in solving the bank's problem of lending under asymmetric information. Margins are found to be a direct function of the probability of failure and an inverse function of security (for given loan size) consistently with collateral being invoked to solve the Moral Hazard problem. Business survival is also found to be enhanced by owner equity inputs (for given debt) again consistent with a requirement for owner financial inputs to enhance (unobservable) effort. Security rises along with loan size and survival chances, a finding consistent with (a) a firm loan size effect (larger borrowers have lower marginal admin cost to the bank), and with (b) positive borrower self-selection (better borrowers offer collateral because they are less likely to experience forfeiture.) Observable business characteristics are found to play an important intermediary role in the solution to the moral hazard problem. More mature proprietors have more experience, business commitment, assets for borrowing and the willingness to use them for loan collateral. Their contract parameters reflect these facts.     

Driving Trucks and Driving Sales? The Impact of Delivery Personnel on Customer Purchase Behavior

This study investigates how and under what conditions delivery persons, specifically truck drivers of a supplier firm, affect customers’ purchase behavior in industrial customer–supplier relationships. Drawing on service quality and customer contact literature, we test a proposed theoretical model that suggests a positive direct effect of personal contact quality (provided by a delivery person) on sales as well as three situational constraints that determine the occurrence and strength of the direct effect.     

Multi-channel store image and the effects on purchase intention

Consumer practices of purchasing goods and services through multiple channels versus a single channel have become common and reflect a change in purchase behaviours. This study identifies six dimensions of the multi-channel store image and proposes that they have positive effects on purchase intention and consumer characteristics moderate the relationship. A survey questionnaire was developed and administered to shoppers of two bookstores in Taiwan. A structural model tested the direct effects of the multi-channel store image on purchase intention, and that the moderating effects of consumer characteristics. The results suggest that four of the six dimensions – financial concern, psychosocial concern, time and convenience, and usefulness influence purchase intention. Consumer characteristics (age, gender, education, occupation) did not moderate the relationship.     

Service Satisfaction: An Empirical Analysis of Consumer Satisfaction in Financial Services

Does the widely accepted espectancy-disconfirmation model apply to situations within a financial services context? Or could it be, due to specific characteristics of services, that a different model applies? This paper addresses these questions and tests the relationships between consumer expectations, performance, disconfirmation, .satisfaction and repeat purchase in a lisrel model. The results would suggest that the relevancy of disconfirmation is fairly apparent and that expectations have only an indirect influence on satisfaction where financial services are concerned. The performance level of financial services however has a strong positive direct effect on satisfaction.     

Influences on consumer response to direct mail coupons: An integrative review

A substantial and growing body of research on coupons and coupon effectiveness has emerged in the marketing literature. The objective of this paper is to review and consolidate the findings of previous studies to provide a better understanding of the factors that influence consumer response to direct mail coupons. The effects of coupon, brand, product category, and consumer characteristics on redemption behavior and incremental sales are examined, and their implications for the effectiveness of direct mail coupon promotions are discussed. Based on the findings of prior studies, a theoretical model of coupon effects on purchase behavior is proposed. Several key issues that need to be addressed in future research are identified. © 1996 John Wiley & Sons, Inc.     

Consumer purchase intentions for green products: Mediating role of WTP and moderating effects of framing

This research examines the role of consumers' willingness to pay (WTP) in the purchase decision process for a green product and investigates the moderating effects of two types of framing: price and ecological message claim. Using an experimental design, 262 participants were assigned randomly to one of nine conditions (3 price × 3 ecological message frames). The results reveal a mediating effect of WTP on the relationship between consumers' perceptions and purchase intentions. Furthermore, a price framed in aggregate terms reinforces the positive effect of WTP on purchase intention. The mere presence of an ecological message claim also enhances the relation between WTP and purchase intentions. This research proposes ways marketers can promote their green products. The results encourage the use of ecological messages and frames of prices in an aggregate form to enhance consumers' purchase intentions through WTP.     

Factors affecting couples' decisions to jointly shop

This paper explores the factors that influence individuals' decisions to jointly shop. Drawing from qualitative interviews and relevant theories, the researchers present a model of couple's likelihood of joint shopping. The model includes utilitarian motives (product purchase relevance and perceived financial risk), hedonic motives (expected shopping pleasure with one's partner), and a situational motive (time availability), along with two moderators (gender and relationship length). Online survey respondents answer questions relative to an experimental scenario involving the purchase of furniture or electronics. Results indicate that while all variables studied are influential, expected shopping pleasure and relevance of the purchase to both parties are the most influential aspects in the decision to shop together. Additionally, for males perceived financial risk has a stronger effect on their decision to jointly shop than it does for females.     

Maximizing Profits for a Multi-Category Catalog Retailer

It is a common trend in the retail industry for catalog retailers to mail multiple catalogs, each promoting different product categories. The existing catalog mailing models do not address the issue of optimizing multi-category catalog mailing. We address this research gap by introducing a model that integrates the when and what components of a customer's purchase decision into the how much component (number of catalogs) of a firm's cross-selling strategy. In addition to comparing the impact of category-specific versus full product catalogs in generating sales in a specific category, the study also finds relative impacts of various category-specific catalogs. We jointly estimate the probability of purchase and purchase amounts in multiple product categories by using multivariate proportional hazard model (MVPHM) and a regression based purchase amount model in a Hierarchical Bayesian framework. The model accounts for unobserved heterogeneity, and uses a control function (CF) approach to account for endogeneity in catalog mailing. The results from the Genetic Algorithm (GA) based optimization suggest that the catalog mailing policy as per the proposed model would be able to generate 38.4 percent more customer lifetime value (CLV) from a sample of 10 percent of the households as compared to the current catalog mailing policy of the retailer by reallocation of the catalogs across customers and mailing periods based on their propensity to buy.     

Cross-buying in retailing: Drivers and consequences

The phenomenon of cross-buying by consumers enables retailers to cross-sell their products and increase revenue contribution from existing customers. The effectiveness of cross-selling can be greatly improved by identifying the drivers of cross-buy and using them to target the right customers. In this study we identify exchange characteristics such as average interpurchase time, ratio of product returns, and focused buying, and product characteristics such as category of first purchase, as important drivers of cross-buy. The impact of marketing efforts of the firm on cross-buy is also identified. The results of the study have important implications for academicians in understanding what drives cross-buying as well as practitioners to help design more effective cross-selling strategies.     

Gender bias and the availability of business loans

Social structure, values, and gender socialization have undoubtedly disadvantaged women in the process of preparing for a career in business, and there is a widely held view that women are subject to discrimination by financial institutions. However, the “evidence” to verify this belief has largely been from studies where women have claimed that they were subject to discrimination in the loan situation, without either supporting evidence, or control data from a sample of male loan applicants.Two experiments were carried out, using a Goldberg type procedure, to test the belief that women are unfairly discriminated against when seeking a loan to establish a business venture. Carefully constructed scenarios of an application for loan finance to purchase a commercial enterprise were mailed to loan officers of major trading bank branches. The scenarios were identical in all respects except for the sex and education level of applicants. Loan officers were asked whether or not they would approve loan finance for the proposed business purchase and to indicate factors that contributed to their decisions.Significant differences in response to female and male applicants were observed in both experiments. In Experiment I (University education) both sexes were equally likely to obtain a loan, but “education” was considered a more important factor for the female applicant than for the male. In Experiment II (High school education) the female applicant was less likely to obtain a loan than the male applicant.The results support the widely held perception that women can experience gender discrimination when seeking start-up capital. Such discriminatory behavior by loan officers may not be, and probably is not, intentional. Rather, the pervasiveness of the social construction of differential gender roles in western culture is such that it is more likely that discrimination is unconscious, and consequently more difficult to change.     

Time heals many wounds – explaining the immediate and delayed effects of message sidedness

This study investigates the immediate and delayed effects of advertising messages including both positive and negative information. A two-sided message has a negative effect on message attitudes due to two mediating variables with trade-off effects: valence and balance. These two variables are also responsible for the alignment of the effect of sidedness on message attitudes and purchase intentions over time: the negative effects of two-sided messages are neutralized over time because negative information is reevaluated, improving the valence of the message. The results explain the negative effects of message sidedness that have been found in prior research and they show that a two-sided message in advertising is not necessarily inferior to a one-sided message despite unfavorable short-term effects.     

Source characteristics and advertising effectiveness

The study examines the impact of source likeability and source credibility on the effectiveness of print advertisements. A theoretical model that depicts the impacts of source characteristics on (1) ad attitude, (2) brand attitude, and (3) willingness to purchase is investigated using data collected through a quasi-experimental design. In addition to direct impacts, the moderating role of message processing motivation (involvement) and product category knowledge in the relationships of interest are investigated via multigroup analyses. Findings indicate that the sequence of relationships between source characteristics, attitudinal responses and willingness to purchase may vary substantially across the four conditions characterised by high/low levels of processing motivation and product category knowledge.     

The Financial Services Environment and Schools' Savings Rates in the San Francisco Kindergarten to College Program

Children's savings accounts (CSAs) have emerged as a promising intervention to improve educational outcomes, curtail rising student loan debt, and promote equality of opportunity. Numerous localized CSA programs have emerged in the last decade, and many are embedded within school systems. This study leverages novel data to investigate participation in one of the oldest and most well‐known CSA programs in the country: the San Francisco Kindergarten to College (K2C) Program in the San Francisco Unified School District. Spatial analysis of 21,617 accounts at 74 elementary schools reveals statistically significant differences in the rates of elementary schools' K2C account participation based on the concentrations of banks, credit unions, and alternative financial service providers—net controls for neighborhood demographics. Unless explicitly addressed, substantial variations in the financial service environment across neighborhoods could undermine participation in school‐based CSA programs for the very children these programs intend to support.     

次贷危机背景下我国商业银行对个人住房信贷风险的防范

美国次贷危机已演变成为了全球性的金融危机。我国商业银行的个人住房信贷扩张累积了较大风险与个贷危机,次贷危机的冲击将使个人住房贷款者信用风险的集中爆发,也会使房地产市场发展的不确定性风险加大等问题完全暴露。我国商业银行必须采取措施,提前防范其对银行体系内个人住房信贷所产生的不良影响,严格控制个人住房贷款者的信用级别,完善并严厉执行银行体系的内部控制,增强银行自身的流动性,加强金融创新监管,以全面保证商业银行信贷资产运作的安全性。