Capital injection, restructuring targets and personnel management: The case of Japanese regional banks
AbstractA case study of the Japanese bank recapitalization by Hoshi and Kashyap (2005) identified a bank that overstated the progress of required personnel downsizing by shifting employees to subsidiaries. This paper asks if the recapitalization program had a design flaw. We focus on regional banks with a unique panel dataset of 81 banking groups that allows us to observe the employment levels of subsidiaries, in addition to those of parent banks, over fiscal 1994–2006. We estimate a labor-demand equation with sluggish adjustment to compare the employment patterns of public capital recipients and other banks. The result indicates that the shuffling of personnel to subsidiaries was a common response among banks that received large capital injections. Our finding highlights a tension between a reconstruction program and labor law when a country has a tight law on dismissal.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of the Japanese and International Economies.
Volume (Year): 26 (2012)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/inca/622903
Recapitalization program; Employee downsizing;
Other versions of this item:
- Kazuki Onji, David Vera and Jenny Corbett, 2011. "Capital Injection, Restructuring Targets and Personnel Management: The Case of Japanese Regional Banks," Asia Pacific Economic Papers 390, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
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