NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Is Bank-Centered Corporate Governance Worth It? A Cross-Sectional Analysis of the Performance of Japanese Firms during the Asset Price Deflation

Jun-Koo Kang, Rene M. Stulz

NBER Working Paper No. 6238
Issued in October 1997
NBER Program(s):   CF

This paper examines the determinants of firm stock-price performance from 1990 to 1993" in Japan. During that period of time, the typical firm on the Tokyo Stock Exchange lost more" than half its value and banks experienced severe adverse shocks. We show that firms whose debt" had a higher fraction of bank loans in 1989 performed worse from 1990 to 1993. This effect is" statistically as well as economically significant and holds when we control for a variety of" variables that affect performance during this period of time. We find that firms that were more" bank-dependent also invested less during this period than other firms. This evidence points to an" adverse effect of bank-centered corporate governance, namely that firms suffer when their banks" are experiencing difficulties.

download in pdf format
   (1407 K)

email paper

This paper is available as PDF (1407 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6238

Published: Kang, Jun-Koo and Rene M. Stulz. "Do Banking Shocks Affect Borrowing Firm Performance? An Analysis Of The Japanese Experience," Journal of Business, 2000, v73(1,Jan), 1-23.

Users who downloaded this paper also downloaded these:
Beltratti and Stulz w15180 Why Did Some Banks Perform Better During the Credit Crisis? A Cross-Country Study of the Impact of Governance and Regulation
Ito and Mishkin Two Decades of Japanese Monetary Policy and the Deflation Problem
Gorton and Schmid w5453 Universal Banking and the Performance of German Firms
Laeven and Levine w14113 Bank Governance, Regulation, and Risk Taking
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us