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Identifier to cite or link to this item: https://hdl.handle.net/10086/13929

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Title
Japan's Banking Crisis: Who has the Most to Lose?
Creator
Creator Name
Miyajima, Hideaki Miyajima, Hideaki
宮島, 英昭 宮島, 英昭
ミヤジマ, ヒデアキ ミヤジマ, ヒデアキ
Affiliation
Affiliation Name
Waseda University School
Creator Name
Yafeh, Yishay Yafeh, Yishay
Affiliation
Affiliation Name
The Hebrew University of Jerusalem
Affiliation
Affiliation Name
The University of Montreal
Editor
Contributor Name
Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University
Abstract
Japan has experienced a deep and prolonged banking crisis in the 1990s. In this paper we attempt to identify the characteristics of companies which have the most to lose from the banks' malaise. Using stock price data, we calculate abnormal returns of non-financial companies around significant dates in the history of the banking crisis, starting in 1995. The events we study include various government actions to address the crisis, downgrading of banks by international rating agencies, and bank mergers. We find that not all companies are equally sensitive to events in the banking sector. The most affected are small companies, with low profits, in low-tech sectors, with high leverage and limited access to bond markets. These findings are consistent with macroeconomic "credit crunch" theories according to which small companies with limited reputation are the most affected when banks reduce lending. Our results are also in line with theories suggesting that bank debt is not very important for financing innovation.
Description
This Draft: May 2003
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2003-06
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
CEI Working Paper Series ; No. 2003-15
Relation
Related Identifier
URI
  http://cei.ier.hit-u.ac.jp/index.html
NCID
AA11590659
Number of Pages
32
Appears in Collections
CEI Working Paper Series
URL
https://hdl.handle.net/10086/13929