| Project/Area Number |
16530217
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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 |
Public finance/Monetary economics
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| Research Institution | Chuo University |
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Principal Investigator |
HORIUCHI Akiyosi Chuo University, Faculty of Policy Studies, Professor, 総合政策学部, 教授 (00018029)
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| Co-Investigator(Kenkyū-buntansha) |
QING-YUAN Sui Yokohama City University, Faculty of Economics and Business Administration, Assistant Professor, 商学部, 助教授 (80244408)
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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 |
¥2,200,000 (Direct Cost: ¥2,200,000)
Fiscal Year 2005: ¥800,000 (Direct Cost: ¥800,000)
Fiscal Year 2004: ¥1,400,000 (Direct Cost: ¥1,400,000)
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| Keywords | bank lending / relationship banking / corporate governance / organ banking / financial deregulation / rent / bank administration / 金融行政 |
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| Research Abstract |
This research project investigated functions and limitation of the Japanese financial system which has been characterized by the intimate relationship between banks and borrower firms.
(1)We investigated how the so-called ‘organ banks' contributed to Japan's industrial development at the beginning of the 20^<th> century. At that time, most small scale banks were established by entrepreneurs who wanted to raise funds through issuing bank deposits. Thus, the close connection of bank management with enterprises was prevalent at the early stage of industrialization. Many have thought that the connection characterizing the ‘organ banks' made the Japanese banking very fragile and leading to frequent bank runs at the early 20^<th> century. But our analysis revealed that the small scale banks were more robust than many thought, and the business model of the ‘organ banking' contributed to the early industrialization in Japan. After the World War I which started heavy and chemical industrializati
… More
on in Japan, the small-scale ‘organ banks' suffered from fragility.
(2)It has been a conventional view that the intimate relationships with main banks and their client firms strengthened the effective corporate governance and promoting industrial development in the Japan's high-growth era, but that the financial deregulation started at the 1980s weakened the relationships and undermined the corporate governance mechanism at the end of the 1980s. The consequence of the weakening governance was conceived as causing the so-called ‘financial bubble' in the late 1980s, and the serious non-performing loan problems and the macroeconomic stagnation during the 1990s. Our research project, based on panel analyses of more than 1,600 companies' financial statistics, investigated the relevancy of this conventional view regarding the Japan's corporate governance based on bank-firm relationships. The statistical results show that the financial deregulation of the 1980s did not significantly influence mechanisms of the corporate governance in Japan, and the so-called ‘main bank relationship' did not contributed to efficient management of borrower firms even during the 1970s. Our analysis also suggests that the market competition led to efficient management of individual firms not only before 1980, but also after 1980. Less
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