Balance sheet deterioration and credit allocations: Japanese evidence from the short-term economic survey of enterprises
AbstractThis study is an empirical attempt to investigate the effects of balance sheet deterioration of Japanese firms and banks in the 1990s on credit allocation using the short-term economic survey of enterprises. This survey contains a unique item: proportion of firms perceiving the lending attitude as severe. After developing a theoretical model to link this item with the balance sheet conditions of borrowers and lenders, we estimate the relationship derived from the model. We find that credit was reduced when the balance sheet of firms and banks deteriorated. The effects are notably large for non-manufacturing industries.
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Bibliographic InfoArticle provided by Elsevier in its journal Japan and the World Economy.
Volume (Year): 23 (2011)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/505557
Tankan survey Credit crunch Ever-greening Non-performing loans Corporate debt;
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