1997 Fiscal Year Final Research Report Summary

THE STRUCTURE OF CLAIMS IN CAPITAL MARKET : FROM THE STANDPOINT OF RISK SHARING

Research Project

Project/Area Number	07803011
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Single-year Grants
Section	一般
Research Field	Commerce
Research Institution	OSAKA CITY UNIVERSITY
Principal Investigator	ZHAI Linyu ASSOCIATE PROF., FACULTY OF BUSINESS, OSAKA CITY UNIV., 商学部, 助教授 (40236964)
Project Period (FY)	1995 – 1997
Keywords	CLAIMS STUCTURE / ATTITUDE TOWARD RISKS / LAW ENVIRONMENT / DIRECT FINANCE
Research Abstract	This study shows that the crucial determinants of the claims structure in capital market are investor's attitude toward risks and law environment related to investor protection. The difference between Japan and U.S.in claims structure can be well explained by these two factors. Compared with Japanese investors, because American investors are less risk aversive, so that it is a rational and natural way to use more securities to raise capital in U.S.The agency costs of using such direct finance are not very expensive the law environment is more oriented to protect investors in U.S.Although the dependence on indirect finance in Japan can be well rationalized by investor's high risk aversive attitude and the contract-superior Japanese society, the direct finance tends to be more important in future due to the changes in both the attitude toward investment risks and the law environment.