On The Costs Of A Bank-Centered Financial System: Evidence From The Changing Main Bank Relations In Japan  

Oleh:

Weinstein, Davis E. ; Yafeh, Yishay

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 53 no. 2 (Apr. 1998), page 635-672.
Topik: system; finance; central bank; capital market
Fulltext: p 635.pdf (291.36KB)

Isi artikel

We examine the effects of bank–firm relationships on firm performance in Japan. When access to capital markets is limited, close bank–firm ties increase the availability of capital to borrowing firms, but do not lead to higher profitability or growth. The cost of capital of firms with close bank ties is higher than that of their peers. This indicates that most of the benefits from these relationships are appropriated by the banks. Finally, the slow growth rates of bank clients suggest that banks discourage firms from investing in risky, profitable projects. However, liberalization of financial markets reduces the banks’ market power.

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