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Japanese SMEs and the credit guarantee system after the global financial crisis

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Listed:
  • Nobuyoshi Yamori
  • David McMillan

Abstract

This paper provides a brief explanation of the Japanese public credit guarantee system and analyzes what role it played during the global financial crisis. The author conducted a questionnaire survey of small and medium-sized enterprises (SMEs) in Aichi Prefecture, the prefecture most seriously hit by the crisis, in collaboration with the Aichi-ken Credit Guarantee Corporation. Using the survey, which provides valuable information about the usage of the credit guarantee program, this paper finds that the credit guarantee system was effective in protecting the economy from collapsing. The system was so generous that now almost all SMEs want it to remain unchanged. However, as the generous system brings heavy financial burdens on the Japanese government and, more seriously, discourages firms and banks from improving their efficiencies, the author insists that reforms, such as limiting the target and the guarantee coverage, are inevitable.

Suggested Citation

  • Nobuyoshi Yamori & David McMillan, 2015. "Japanese SMEs and the credit guarantee system after the global financial crisis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 3(1), pages 1002600-100, December.
  • Handle: RePEc:taf:oaefxx:v:3:y:2015:i:1:p:1002600
    DOI: 10.1080/23322039.2014.1002600
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    File URL: http://hdl.handle.net/10.1080/23322039.2014.1002600
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    References listed on IDEAS

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    1. Uesugi, Iichiro & Sakai, Koji & Yamashiro, Guy M., 2010. "The Effectiveness of Public Credit Guarantees in the Japanese Loan Market," Journal of the Japanese and International Economies, Elsevier, vol. 24(4), pages 457-480, December.
    2. Ono, Arito & Uesugi, Iichiro & Yasuda, Yukihiro, 2013. "Are lending relationships beneficial or harmful for public credit guarantees? Evidence from Japan's Emergency Credit Guarantee Program," Journal of Financial Stability, Elsevier, vol. 9(2), pages 151-167.
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    Cited by:

    1. repec:taf:oaefxx:v:5:y:2017:i:1:p:1279864 is not listed on IDEAS
    2. repec:eee:asieco:v:50:y:2017:i:c:p:1-13 is not listed on IDEAS

    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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