The Main Bank System and Corporate Investment: An Empirical Reassessment
AbstractThis paper examines whether the sensitivity of corporate investment to internal funds depends on the firm's access to a main bank, using the sample of Japanese manufacturing firms constructed by Hayashi and Inoue (1991). For either of two classifications of firms by their access to a main bank, there is no evidence that main bank ties mitigate the sensitivity of investment to the firm's liquidity. The large effect of main bank ties reported in Hoshi, Kashyap, and Scharfstein (1991) is most likely due to the relatively poor quality of their capital stock estimate.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6172.
Date of creation: Sep 1997
Date of revision:
Publication status: published as Aoki, M. and G. Saxonhouse (eds.) Finance, Governance, and Competitiveness in Japan. Oxford University Press, 2000.
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Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G3 - Financial Economics - - Corporate Finance and Governance
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