publication . Preprint . 1999

Firm Investment and Balance-Sheet Problems in Japan

Toshitaka Sekine;
Open Access
  • Published: 01 Aug 1999
Abstract
This paper investigates whether balance-sheet conditions of firms and their main banks matter for firm investment behavior using dynamic corporate panel data in Japan for the period 1985-95. It finds that smaller non-bond issuing firms were facing liquidity constraints; these firms’ balance-sheet conditions (the debt asset ratios) affected their investment from the midst of the bubble era by influencing main banks’ lending to them; and the deterioration of their main banks’ balance-sheet conditions constrained these firms’ investment from about 1993. These findings highlight the potential macroeconomic impact and importance of the credit channel of monetary poli...
Subjects
free text keywords: Investment;Japan;credit channel, dynamic panel data, bond, bank of japan, bond issuing, bank bond, deposit insurance
Powered by OpenAIRE Open Research Graph
Any information missing or wrong?Report an Issue