| Project/Area Number |
16530173
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic policy
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| Research Institution | Hitotsubashi University |
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Principal Investigator |
WIWATTANAKANTANG Yupana Hitotsubashi University, Institute of Economic Research, Associate Professor, 経済研究所, 助教授 (20361842)
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| Co-Investigator(Kenkyū-buntansha) |
花崎 正晴 日本政策投資銀行, 設備投資研究所, 副所長(研究職) (60334588)
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| Project Period (FY) |
2004 – 2005
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| Project Status |
Completed (Fiscal Year 2005)
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| Budget Amount *help |
¥3,300,000 (Direct Cost: ¥3,300,000)
Fiscal Year 2005: ¥1,200,000 (Direct Cost: ¥1,200,000)
Fiscal Year 2004: ¥2,100,000 (Direct Cost: ¥2,100,000)
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| Keywords | Corporate Governance / Ownership Structure of Banks / Monitoring by shareholders / Financial System / Banking Crisis in Japan / Problem of Non-performing loans / Agency Cost / Bank Lending |
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| Research Abstract |
In this study, we investigate the corporate governance role of large shareholders of banks in Japan. We construct a comprehensive database of ownership and control of all banks from 1981-1998. We find that banks and insurers dominate other types of shareholders as the top five largest shareholders. Our empirical results show that their shareholdings are positively associated with loan growth, and negatively associated with performance. The results suggest that large shareholders were not tough. Hence, bank managers were able to act in their own interest, for example, keep extending lending to weak firms so that they do not have to take responsibilities for failed loans. The incentive by these large shareholders to go along with bank managers may be due to other business relationships that they have with the banks. Overall, we argue that the deficiency of effective corporate governance of banks might have caused inefficient management since the 1980s and resulted in serious banking problems that have jeopardized the stability of the financial and economic system in Japan throughout the 1990s.
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