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Public debt financing, ownership structures and bankers on boards: evidence from Japan

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  • Takanori Tanaka

Abstract

This article provides new insights on determinants that affect the allocation of bankers to firm boards by focusing on the benefits and costs they bring to the boards. Using data on Japanese firms during the period 2003-2007, we find that firms with lower credit ratings have higher proportions of bankers on their boards to gain easier access to bank credit. In contrast, firms with large shareholders face potential costs arising from conflicts of interest between large shareholders and banks, and accept fewer bankers on their boards. The results indicate that availability of public debt financing and ownership structures are important factors affecting the allocation of bankers to firm boards.

Suggested Citation

  • Takanori Tanaka, 2011. "Public debt financing, ownership structures and bankers on boards: evidence from Japan," Applied Economics Letters, Taylor & Francis Journals, vol. 18(4), pages 315-318.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:4:p:315-318
    DOI: 10.1080/13504851003689650
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    References listed on IDEAS

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    1. Kaplan, Steven N. & Minton, Bernadette A., 1994. "Appointments of outsiders to Japanese boards: Determinants and implications for managers," Journal of Financial Economics, Elsevier, vol. 36(2), pages 225-258, October.
    2. Takeo Hoshi & Anil Kashyap & David Scharfstein, 1991. "Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(1), pages 33-60.
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