Empirical analyses on the transmission of exogenous shocks through financial institutions

2015 Fiscal Year Final Research Report

• Project/Area Number: 26885087
• Research Category: Grant-in-Aid for Research Activity Start-up
• Allocation Type: Single-year Grants
• Research Field: Money/ Finance
• Research Institution: Hitotsubashi University
• Principal Investigator: MIYAKAWA Daisuke 一橋大学, 大学院国際企業戦略研究科, 准教授 (00734667)
• Project Period (FY): 2014-08-29 – 2016-03-31
• Keywords: 銀行貸出 / バランスシートチャネル / 金融政策 / 資金需要

Outline of Final Research Achievements

In this project, we empirically study the transmission of exogenous shocks hitting financial institutions to their client firms. Using a unique data set accounting for financial relationships between firms and financial institutions, we found that the tightening of monetary policy led to the contraction of loan provision made by banks with weak balance sheet conditions (e.g., low liquidity). We also found that during the downturn in stock markets, venture capital funds managed by venture capital firms with smaller investment experience reduced their fund provisions to firms more largely. Given that these results are confirmed in the estimation taking into account the effect associated with firms' demand for loan and fund, we confirm that exogenous negative shocks hitting financial institutions are transmitted more largely to their client firms through financial institutions with weaker balance sheet condition and smaller investment experience.

Free Research Field

金融論