Dark-side evidence on bank-firm relationship in Japan
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 198-213 |
| Journal / Publication | Japan and the World Economy |
| Volume | 19 |
| Issue number | 2 |
| Online published | 11 Nov 2005 |
| Publication status | Published - Mar 2007 |
Link(s)
Abstract
Kang and Stulz [Kang, J.K., Stulz, R.M., 2000. Do banking shocks affect borrowing firm performance? An analysis of the Japanese experience. Journal of Business 73, 1-23] find that firms which are more dependent on banks perform especially poorly during the early 1990s when Japan suffered a great economic shock. Examining the same period, this study provides further evidence on the dark side of a close bank-firm relationship. The results reveal that main banks try to stabilize their earnings by asking their closely controlled clients to over-borrow and over-invest. More specifically, we find a higher main bank power (MBP) is associated with higher loan ratio, higher interest payments, higher investment expenditure but worse firm performance.
Research Area(s)
- Bank loan, Bank-firm relationship, Banking, Main bank, Ownership structure
Citation Format(s)
Dark-side evidence on bank-firm relationship in Japan. / Yao, Jun; Ouyang, Hongbing.
In: Japan and the World Economy, Vol. 19, No. 2, 03.2007, p. 198-213.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
