Corporate financing and product market competition: evidence from firm-level data in Japan
This paper investigates the link between external financing and product market competition by focusing on different maturity structures. Using firm-level data for Japanese manufacturing firms over the period 1990-1995, we find that long-term loans enable firms to compete aggressively at a level below profit maximization. By contrast, short-term loans are not related to product market competition. Our results suggest that long-term loans play an important role in investment in market share for long-term profits through lowering prices.
Volume (Year): 30 (2010)
Issue (Month): 2 ()
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1986. "Business Cycles and the Relationship Between Concentration and Price-Cost Margins," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 1-17, Spring.
- Michael E. Porter & Mariko Sakakibara, 2004. "Competition in Japan," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 27-50, Winter.
- Chevalier, Judith A, 1995. "Capital Structure and Product-Market Competition: Empirical Evidence from the Supermarket Industry," American Economic Review, American Economic Association, vol. 85(3), pages 415-35, June.
- Erol, Turan, 2003. "Capital structure and output pricing in a developing country," Economics Letters, Elsevier, vol. 78(1), pages 109-115, January.
- Erol, Turan, 2005. "Corporate debt and output pricing in developing countries: Industry-level evidence from Turkey," Journal of Development Economics, Elsevier, vol. 76(2), pages 503-520, April.
- Phillips, Gordon M., 1995. "Increased debt and industry product markets An empirical analysis," Journal of Financial Economics, Elsevier, vol. 37(2), pages 189-238, February.
- Marcus Asplund & Rickard Eriksson & Niklas Strand, 2005. "Prices, Margins and Liquidity Constraints: Swedish Newspapers, 1990-1992," Economica, London School of Economics and Political Science, vol. 72(286), pages 349-359, 05.
- Judith A. Chevalier & David S. Scharfstein, 1994.
"Capital Market Imperfections and Countercyclical Markups: Theory and Evidence,"
NBER Working Papers
4614, National Bureau of Economic Research, Inc.
- Chevalier, Judith A & Scharfstein, David S, 1996. "Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence," American Economic Review, American Economic Association, vol. 86(4), pages 703-25, September.
- Weinstein, David E & Yafeh, Yishay, 1995.
"Japan's Corporate Groups: Collusion or Competitive? An Empirical Investigation of Keiretsu Behavior,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 43(4), pages 359-76, December.
- Weinstein, D.E. & Yafeh, Y., 1993. "Japan's Corporate Groups: Collusive or Competitive? An Empirical Investigation of Keiretsu Behavior," Harvard Institute of Economic Research Working Papers 1623, Harvard - Institute of Economic Research.
- Kaplan, Steven N, 1994. "Top Executive Rewards and Firm Performance: A Comparison of Japan and the United States," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 510-46, June.
- Chevalier, Judith A, 1995. " Do LBO Supermarkets Charge More? An Empirical Analysis of the Effects of LBOs on Supermarket Pricing," Journal of Finance, American Finance Association, vol. 50(4), pages 1095-1112, September.
- Abe, Yukiko, 1997. "Chief Executive Turnover and Firm Performance in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 11(1), pages 2-26, March.
When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-09-00440. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.