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Institutions, Competition, and Capital Market Integration in Japan

Author

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  • Kris James Mitchener

    (Assistant Department of Economics, Santa Clara University (E-mail:kmitchener@scu.edu))

  • Mari Ohnuki

    (Institute for Monetary and Economic Studies, Bank of Japan (E-mail: mari.oonuki@boj.or.jp))

Abstract

Using a newly-constructed panel data set which includes annual estimates of lending rates for 47 Japanese prefectures, we analyze why interest rates converged over the period 1884-1925. We find evidence that technological innovations and institutional changes played an important role in creating a national capital market in Japan. In particular, the diffusion in the use of the telegraph, the growth in commercial branch banking networks, and the development of Bank of Japan fs branches reduced interest-rate differentials. Bank regulation appears to have played little role in impeding financial market integration.

Suggested Citation

  • Kris James Mitchener & Mari Ohnuki, 2008. "Institutions, Competition, and Capital Market Integration in Japan," IMES Discussion Paper Series 08-E-12, Institute for Monetary and Economic Studies, Bank of Japan.
  • Handle: RePEc:ime:imedps:08-e-12
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    File URL: http://www.imes.boj.or.jp/research/papers/english/08-E-12.pdf
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    References listed on IDEAS

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    Cited by:

    1. Nabi, Mahmoud Sami & Suliman, Mohamed Osman, 2011. "Credit rationing, interest rates and capital accumulation," Economic Modelling, Elsevier, vol. 28(6), pages 2719-2729.

    More about this item

    Keywords

    Monetary Policy; Input-Output Matrix; Durables; Non-durables;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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