The Impact of Institutions on Lending
In order to exemplify the impact that institutions have on lending, this part first looks at the theoretical foundations of the New Institutional Economics — chapter 1.1. Basic terms and definitions are introduced here, the crucial importance of institutions to economic performance is highlighted, and main instruments of institutional analysis are deployed. In chapter 1.2, lending processes are institutionally analysed, thereby showing the set of institutions which influence lending. In order to answer the questions posed by the study, a cognitive approach is developed in chapter 1.3 to observe informal institutions of lending by diagnosing the action-regulating knowledge of bankers (which shape bankers’ mental models).
KeywordsTransaction Cost Mental Model Institutional Change Institutional Framework Institutional Economic
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