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Debt Restructuring Of Japanese Corporations: Efficiency Of Factor Allocations And The Debt-Labor Complementarity

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  • IWAISAKO, TOKUO
  • 祝迫, 得夫
  • FUKUOKA, CHIAKI
  • KANOU, TAKEFUMI

Abstract

Using the data from the Financial Statements Statistics of Corporations by Industry (FSSCI), we examine whether the decrease of corporate debt subsequent to the banking crisis in the late 1990s improved the efficiency of factor allocation at the microeconomic level. While the cross-sectoral movement of capital seems to have increased in the 2000s, negative profit is associated with the increase of corporate debt during the period of mild recovery in the mid-2000s. Thus even after the banking panic and the subsequent policy measures cleaned up major nonperforming loans, some nonnegligible number of "zombie firms" must have remained.

Suggested Citation

  • Iwaisako, Tokuo & 祝迫, 得夫 & Fukuoka, Chiaki & Kanou, Takefumi, 2013. "Debt Restructuring Of Japanese Corporations: Efficiency Of Factor Allocations And The Debt-Labor Complementarity," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 54(1), pages 119-135, June.
    • Handle: RePEc:hit:hitjec:v:54:y:2013:i:1:p:119-135
    DOI: 10.15057/25775
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    References listed on IDEAS

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    1. Ricardo J. Caballero & Takeo Hoshi & Anil K. Kashyap, 2008. "Zombie Lending and Depressed Restructuring in Japan," American Economic Review, American Economic Association, vol. 98(5), pages 1943-1977, December.
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    3. Flannery, Mark J, 1986. "Asymmetric Information and Risky Debt Maturity Choice," Journal of Finance, American Finance Association, vol. 41(1), pages 19-37, March.
    4. Yumi Saita & Toshitaka Sekine, 2001. "Sectoral Credit Shifts in Japan: Causes and Consequences of Their Decline in the 1990s," Bank of Japan Working Paper Series Research and Statistics D, Bank of Japan.
    5. Diamond, Douglas W., 1993. "Seniority and maturity of debt contracts," Journal of Financial Economics, Elsevier, vol. 33(3), pages 341-368, June.
    6. Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-793, August.
    7. Douglas W. Diamond, 1991. "Debt Maturity Structure and Liquidity Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(3), pages 709-737.
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    Cited by:

    1. Marian Nehrebecki, 2023. "Zombification in Poland in particular during COVID-19 pandemic and low interest rates," Bank i Kredyt, Narodowy Bank Polski, vol. 54(2), pages 153-190.
    2. Ivana Blažková & Ondřej Dvouletý, 2022. "Zombies: Who are they and how do firms become zombies?," Journal of Small Business Management, Taylor & Francis Journals, vol. 60(1), pages 119-145, January.

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    More about this item

    Keywords

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    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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