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Are Japanese Firms Becoming More Independent from Their Banks?: Evidence from the Firm-Level Data of the "Corporate Enterprise Quarterly Statistics," 1994-2009

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  • Yoshiro Miwa

    (Faculty of Economics, University of Tokyo)

Abstract

The Ministry of Finance's "Corporate Enterprise Quarterly Statistics" (Hojin kigyo tokei kiho) is the only statistical source of well-balanced information about the financing behavior of Japanese firms. Indeed, there are few comparable sources available anywhere in the world. Using this firm-level data set from 1994 to 2009, I investigate the financing behavior of Japanese firms with over \10 million in paid-in capital. The conclusions contrast sharply with the conventional wisdom. Much of the research and policy discussions about Japanese finance begin from the premise that banks play a decisive role in firm behavior. This paper shows that firms have maintained a dependence on financial institutions well below the level that the conventional wisdom has claimed. Under the recent "zero-interest-rate, quantity easing" monetary policy, this "independence of the firms from the banks" has increased further. This tendency is clearest among the smaller firms. In turn, this first conclusion raises doubts about the plausibility of the basic premise of research and policy debate on financial issues, and leads us to question whether observers may not have confused a "crisis of financial institutions" with a "financial crisis". Investigation into firm financing behavior under the "financial crisis" from the end of 1997 to the beginning of 1999 does indeed suggest that it was a fiasco caused by the confusion of a "crisis of financial institutions" with a "financial crisis".

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Bibliographic Info

Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-808.

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Length: 40 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:tky:fseres:2011cf808

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  1. Yoshiro Miwa & J. Mark Ramseyer, 2008. "The Implications of Trade Credit for Bank Monitoring: Suggestive Evidence from Japan," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(2), pages 317-343, 06.
  2. Yoshiro Miwa & J. Mark Ramseyer, 2004. "Directed Credit? The Loan Market in High-Growth Japan," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(1), pages 171-205, 03.
  3. Miwa Yoshiro, 2010. "The Reality of Short-term Shocks like the 'Credit Crunch' of 1997-1999 and the 'Financial Crisis' of 2007, and the Effectiveness of 'Emergency' Economic Measures ? A Follow-up to Miwa [2008]," CARF J-Series CARF-J-065, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  4. Miwa, Yoshiro & Ramseyer, J. Mark, 2006. "The Fable of the Keiretsu," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226532707, June.
  5. Yoshiro Miwa, 2011. """Bad Loans", "Delayed Disposals", "Follow-on and Zombie Lending", and the Lost Two Decades": Lessons from the Japanese Experience?" (in Japanese)," CIRJE J-Series CIRJE-J-235, CIRJE, Faculty of Economics, University of Tokyo.
  6. Johannes Stroebel, 2010. "A Summary of the Commentary," Book Chapters, in: Kenneth E. Scott & George P. Shultz & John B. Taylor (ed.), Ending Government Bailouts As We Know Them, chapter 13 Hoover Institution, Stanford University.
  7. Yoshiro Miwa, 2012. "Are Japanese Firms Becoming More Independent from Their Banks?: Evidence from the Firm-Level Data of the "Corporate Enterprise Quarterly Statistics," 1994-2009," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 8(4), pages 415-452, August.
  8. Yoshiro Miwa, 2011. "A Study of Financing Behavior of Japanese Firms with Firm-Level Data from Corporate Enterprise Quarterly Statistics - 1994~2009: Introduction and Summary," CARF F-Series CARF-F-241, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  9. Miwa Yoshiro, 2010. ""Credit Guarantee" Policy [shin'yo hosho seido] for Small Businesses in Japan, with Reference to "the Special Credit Guarantee Policy" during 1998.10 - 2001.3," CARF J-Series CARF-J-061, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  10. Miwa Yoshiro, 2010. "The Reality of Trade Credit and its Link to Bank Borrowing and Inventory: (1) Overall Discussion and Preliminary Investigation," CARF J-Series CARF-J-066, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  11. Miwa Yoshiro, 2010. "The Low 'Bank-Dependence Ratio' and Recent Further Increase in the 'Independence of Firms from Banks'," CARF J-Series CARF-J-064, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  12. Yoshiro Miwa, 2008. ""Credit Crunch"?: Details from Borrower Quarterly Financial Data about What Actually Happened in Japan during 1997-1999," CARF J-Series CARF-J-054, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  13. Miwa Yoshiro, 2010. "The Reality of Trade Credit and its Link to Bank Borrowing and Inventory: (2) Correlation Coefficients and Multiple Regressions," CARF J-Series CARF-J-067, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
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Cited by:
  1. Yoshiro Miwa, 2011. "Are Japanese Firms Becoming More Independent from Their Banks?: Evidence from the Firm-Level Data of the "Corporate Enterprise Quarterly Statistics," 1994-2009," CIRJE F-Series CIRJE-F-808, CIRJE, Faculty of Economics, University of Tokyo.
  2. Yoshiro Miwa, 2012. "How Strongly Do "Financing Constraints" Affect Firm Behavior?: Japanese Corporate Investment since the Mid-1980s," CIRJE F-Series CIRJE-F-862, CIRJE, Faculty of Economics, University of Tokyo.
  3. Yoshiro Miwa, 2012. "How Strongly Do "Financing Constraints" Affect Firm Behavior?: Japanese Corporate Investment since the Mid-1980s," CARF F-Series CARF-F-291, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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