Financial Markets and Corporate Finance during the stagnation in Japan
| Project/Area Number |
16530203
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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 | Fukushima University |
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Principal Investigator |
ONO Masanori Fukushima Univ., Econ. & Bus.Admin., Assoc.Prof., 経済経営学類, 助教授 (60302311)
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| Project Period (FY) |
2004 – 2006
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| Project Status |
Completed (Fiscal Year 2006)
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| Budget Amount *help |
¥1,600,000 (Direct Cost: ¥1,600,000)
Fiscal Year 2006: ¥500,000 (Direct Cost: ¥500,000)
Fiscal Year 2005: ¥500,000 (Direct Cost: ¥500,000)
Fiscal Year 2004: ¥600,000 (Direct Cost: ¥600,000)
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| Keywords | Financial Statement / Financial Crisis / 企業金融 / 不況 / 財務データ |
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| Research Abstract |
Many researchers have examined the extent to which the Japanese economy was affected by the financial crisis. This project sheds light on the crisis from another viewpoint, one on which few researchers have focused. In this financial situation, Large-sized firms such as general trading companies (GTCs) granted more trade credit to their buyers and refrained from receiving trade credit from their sellers. One could say that the Meltzer effect worked and mitigated the potential negative impact on the Japanese economy-at least on many GTCs' trading partners.
This research built the regression form on the theoretical prediction of Nadiri (1969). The empirical results revealed that interest rates do not have a statistically significant level of influence on trade credit. This may provide further evidence that trade credit practice in Japan is dominated by the practice of the seller including a charge as its interest cost in the amount of deferred payments.
In addition to the Nadiri model, I took into account microeconomic financial factors such as capital ratios and the interaction effect with an index for monetary ease. An increase in the capital ratio includes an increase in trade receivables relative to trade payables. Also, the interaction effect with an index for monetary ease supports the Meltzer effect at the microeconomic level. The combined effect is revealed as an asymmetric reaction of trade credit to a capital stock, depending on the macroeconomic financial factor. This finding may explain why researchers differ as to whether trade credit is procyclical or countercyclical.
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Report
(4 results)
Research Products
(2 results)
