TY  - JOUR
AU  - Ando,Albert
AU  - Auerbach,Alan J.
TI  - The Corporate Cost of Capital in Japan and the U.S.:  A Comparison
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1762
PY  - 1989
Y2  - June 1989
UR  - http://www.nber.org/papers/w1762
L1  - http://www.nber.org/papers/w1762.pdf
N1  - Author contact info:
Albert Ando
E-Mail: N/A user is deceased

Alan J. Auerbach
Department of Economics
530 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0711
Fax: 510/643-0413
E-Mail: auerbach@econ.berkeley.edu
M2  - featured in NBER digest on 1986-02-01
AB  - This paper presents evidence about the coats of corporate capital in Japan and the US, for a sample of large companies, and evaluates a variety of hypotheses about why the cost might be lower in Japan.We find that the before-tax return to capital in Japan appears slightly lower than in the U.S. when corrected book measures of earnings are used, but that this result would be reversed if market returns to Japanese equity were used in place of corrected earningsto measure the cost of equity.To what ever extent the cost of capital may actually be lower in Japan, we show that this is unlikely to be due either to a lower overall corporate tax burden or the particular tax advantages of corporate borrowing.
ER  -