Business Cycle and the Financing Behavior of Japanese Firms

2015 Fiscal Year Final Research Report

• Project/Area Number: 25780212
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Money/ Finance
• Research Institution: Kyoto Sangyo University
• Principal Investigator: SAKAI Koji 京都産業大学, 経済学部, 准教授 (80548305)
• Project Period (FY): 2013-04-01 – 2016-03-31
• Keywords: 金融論

Outline of Final Research Achievements

This paper examines the reallocation of credit among Japanese firms during the period FY1980-FY2014. We employ the quarterly Financial Statements Statistics of Corporations by Industry and apply the job reallocation measure proposed by Davis and Haltiwanger (1992) in order to gauge the extent of credit reallocation. Our findings are as follows: (1) there is a substantial amount of credit reallocation at any phase of the business cycle, indicating that firms' financial procurement behavior is inherently quite heterogeneous; (2) overall credit reallocation is procyclical to the business cycle in Japan as a result of strong procyclicality of credit creation and relatively weak countercyclicality of credit destruction.

Free Research Field

金融論