Bank monitoring and the maturity structure of Japanese corporate debt issues

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

17 Scopus Citations
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Author(s)

  • Jun Cai
  • Yan-Leung Cheung
  • Vidhan K. Goyal

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)229-250
Journal / PublicationPacific Basin Finance Journal
Volume7
Issue number3-4
Publication statusPublished - Aug 1999

Abstract

Extant literature suggests that bank lending results in greater information production and control over corporate borrowers. We show that bank lending creates positive externalities in that it improves the contracting environment for other public debt providers. Focusing on the maturity structure of Japanese corporate debt issues, we provide evidence that a higher proportion of bank debt results in public debt of longer maturity. More importantly, the sensitivity of the debt maturity to bank debt ratio is significantly higher for independent firms compared with that of keiretsu-affiliated firms. The evidence is consistent with keiretsu firms having less agency costs of debt compared with independent firms.

Research Area(s)

  • Agency costs, Bank monitoring, Debt maturity, G21, G32, G38, Japanese corporate finance

Citation Format(s)

Bank monitoring and the maturity structure of Japanese corporate debt issues. / Cai, Jun; Cheung, Yan-Leung; Goyal, Vidhan K.
In: Pacific Basin Finance Journal, Vol. 7, No. 3-4, 08.1999, p. 229-250.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review