Bank Ties and Firm Performance in Japan: Some Evidence Since FY2002
Bank for International Settlements, Monetary and Economic Department, 2009 - Bank investments - 43 pages
"Since the mid-1990s, major Japanese banks have sold off a significant portion of their holdings of corporate equity. Using information on the identity of Japanese firms' top 10 shareholders, this paper explores the process of banks' equity disposal. There is some evidence that, after FY2001, banks' sales of equity accelerated, even holdings in firms for which the bank served as the main bank. However, affiliation with a main bank - proxied by firm-bank loan and shareholding ties - continues to be negatively associated with firm performance through FY2004. Regression estimates suggest that firms with strong bank ties are less profitable, face higher interest payments, and yet do not seem to enjoy lower stock price volatility than other firms. These effects are strongest for firms with a history of outside financing options, consistent with earlier arguments that the benefits of main bank relationships accrue to the banks themselves."--Author's abstract
What people are saying - Write a review
We haven't found any reviews in the usual places.
bank dependent Bank of Japan banking groups beta changes client firms coefficient convertible bonds corporate equity dispose of shares dummy variable Elig All lnelig Eligible firms equity disposal equity holdings equity portfolios equity prices estimated evidence EXRET ﬁgures ﬁnancial Financial Economics Financial System financing options firm profitability firm-bank relationship firm's main bank ﬁrm’s ﬁrms four mega-banks Frank Packer Graph group of firms individual banks Ineligible interest coverage ratio interest expenses Japanese financial system Kaigin data Kaigin database Keiretsu largest shareholder lnelig Elig main bank relationships major banks major Japanese banks merger Miyajima Mizuho Morck non-bond debt non-performing loan number of firms number of shares Patrick McGuire portfolio weight regressors Resona Resona Bank RSL_GR SDUM shareholding data shares held stock price volatility t-1 Lag Table Tokyo Mitsubishi UFJ top 10 shareholders top bank top ten shareholders TOP_LNTL TOP_OWN total assets total liabilities total loans trust banks Weinstein and Yafeh