NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Dimitris Christelis

CSEF, University of Naples Federico II
Via Cintia, Monte S. Angelo
I-80126 Napoli (NA)
ITALY
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NBER Working Papers and Publications

January 2003Inefficiency of Corporate Investment and Distortion of Savings Behavior in Japan
with Albert Ando, Tsutomu Miyagawa: w9444
The value of corporate equity in Japan is dramatically smaller than that implied by the sum of the reproduction cost of accumulated investment and the market value of land owned by corporations (that is, the Tobin's average 'q' is much smaller than unity). This discrepancy appears to result from the very low rate of return earned on corporate investment and also from the extraordinarily small and stagnant dividend payments. It has persisted at least since l965, and its size has become progressively larger over time. If the value of corporate equity were sufficiently high to close the discrepancy, the net worth of the household sector would have been larger than its actual value by some 395 trillion yen in l998. Such an addition to household net worth would have generated additional consump...

Published:

Inefficiency of Corporate Investment and Distortion of Savings Behavior in Japan
with Albert Ando, Tsutomu Miyagawa
in Structural Impediments to Growth in Japan, Magnus Blomström, Jennifer Corbett, Fumio Hayashi and Anil Kashyap, editors
 
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