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Importance of regional financial institutions in regional economic development: Based on the results of corporate surveys in Japan's Tokai and Kansai regions

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  • Yamori, Nobuyoshi

Abstract

This paper has analyzed the relationship between medium/small firms and financial institutions based on the results of questionnaires prepared for medium/small firms in the Tokai and Kansai regions. With the development of telecommunication technology and progress in securities market infrastructure, there are fewer cases in which geographical distance poses a problem in financial transactions. However, financing for medium/small firms is expected to remain dependent on indirect finance, i.e., financing through their major trading bank, inasmuch as it will be necessary for financial institutions to play a major role in overcoming the problem of information asymmetry in that sector. More specifically, this type of relationship banking in which periodical and direct contact lends to increased company knowledge is thriving as a means to eliminate the issue of information asymmetry. The direct contact or communication, an integral part of relationship banking entail costs, and can become difficult when banks locate far from firms.

Suggested Citation

  • Yamori, Nobuyoshi, 2008. "Importance of regional financial institutions in regional economic development: Based on the results of corporate surveys in Japan's Tokai and Kansai regions," MPRA Paper 14915, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14915
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    Cited by:

    1. Martin Romero Castillo, 2018. "Determinant Factors For The Development And Competitiveness Of Msmes In The Region Of Guanajuato, Mexico Factores Determinantes Para El Desarrollo Y Competitividad De Las Mipymes En La Region Guanajua," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 11(1), pages 91-100.

    More about this item

    Keywords

    Regional Finance; Japan; Bank; SME Finance;
    All these keywords.

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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