Why do Japanese firms prefer multiple bank relationship? Some evidence from firm-level data

Economic Systems

Volumn 31, Issue 1, 2007, Pages 49-70

  Ogawa, Kazuo ^a   Sterken, Elmer ^b   Tokutsu, Ichiro ^c  

^a OSAKA UNIVERSITY   (Japan)

^b UNIVERSITY OF GRONINGEN   (Netherlands)

^c KONAN UNIVERSITY   (Japan)

Author keywords

Bank control; Discrete choice model; Firm bank relations; Single versus multiple borrowing

Indexed keywords

EID: 33847082594     PISSN: 09393625     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ecosys.2006.08.002     Document Type: Article

References (42)

1. Aoki M., Patrick H., and Sheard P. The Japanese main bank system: an introductory overview. In: Aoki M., and Patrick H. (Eds). The Japanese Main Bank System: Its Relevance for Developing and Transforming Economies (1994), Oxford University Press, Oxford 1-50
2. Bhattacharya S., and Chiesa G. Proprietary information, financial intermediation and research incentives. J. Financ. Intermed. 4 (1995) 328-357
3. Billett M.T., Flannery M.J., and Garfinkel J.A. The effects of lender identity on a borrowing firm's equity return. J. Financ. 50 (1995) 699-718
4. Bolton P., and Scharfstein D.S. Optimal debt structure and the number of creditors. J. Polit. Econ. 104 (1996) 1-25
5. Bris A., and Welch I. The optimal concentration of creditors. J. Financ. 60 (2005) 2193-2212
6. Broecker T. Credit-worthiness tests and interbank competition. Econometrica 58 (1990) 429-458
7. Carletti E. The structure of bank relationships, endogenous monitoring and loan rates. J. Financ. Intermed. 13 (2004) 58-86
8. Degryse H., and Ongena S.R.G. Bank relations and firm profitability. Financ. Manage. 30 (2001) 9-34
9. Detragiache E., Garella P., and Guiso L. Multiple versus single banking relationships: theory and evidence. J. Financ. 55 (2000) 1133-1161
10. Dewatripont M., and Maskin E. Credit and efficiency in centralized and decentralized economies. Rev. Econ. Stud. 62 (1995) 541-555
11. Diamond D. Financial intermediation and delegated monitoring. Rev. Econ. Stud. 51 (1984) 314-393
12. Farinha L.A., and Santos J.A.C. Switching from single to multiple bank lending relationships: determinants and implications. J. Financ. Intermed. 11 (2004) 124-151
13. Flath D. Shareholdings in the keiretsu: Japan's financial groups. Rev. Econ. Stat. 75 (1993) 249-257
14. Foglia A., Laviola S., and Marullo Reedtz P. Multiple banking relationships and the financial fragility of corporate borrowers. J. Bank. Financ. 22 (1998) 1441-1456
15. Fukuda S. The Role of Long-term Loans for Economic Development: Empirical Evidence in Japan, Korea and Taiwan (2001), Mimeo, University of Tokyo
16. Horiuchi A. An empirical overview of the Japanese main bank relationship in relation to firm size. Riv. Int. Sci. Econ. Commer. 40 (1993) 997-1018
17. Horiuchi T. The effect of firm status on banking relationships and loan syndication. In: Aoki M., and Patrick H. (Eds). The Japanese Main Bank System (1994), Oxford University Press, Oxford 258-294
18. Hoshi T., Kashyap A., and Scharfstein D. The role of banks in reducing the costs of financial distress in Japan. J. Financ. Econ. 27 (1990) 67-88
19. Hoshi T., and Kashyap A. Corporate Financing and Governance in Japan: The Road to the Future (2001), MIT Press, Cambridge
20. Houston J.F., and James C. Do relationships have limits? Banking relationships, financial constraints, and investment. J. Bus. 74 (2001) 347-374
21. Ito T. The Japanese Economy (1992), MIT Press, Cambridge
22. James C. Some evidence on the uniqueness of bank loans. J. Financ. Econ. 19 (1987) 217-235
23. Kang J.-K., and Shivdasani A. Firm performance, corporate governance and top executive turnover in Japan. J. Financ. Econ. 38 (1995) 29-58
24. Kang J.-K., and Shivdasani A. Corporate restructuring during performance declines in Japan. J. Financ. Econ. 46 (1997) 29-65
25. Kaplan S.N., and Minton B. Appointments of outsiders to Japanese corporate boards: determinants and implications for managers. J. Financ. Econ. 36 (1994) 225-258
26. Miyajima H. Sengo Nippon Kigyo niokeru Jyotai Izonteki Governance no Shinka to Henyo-Logit Model niyoru Keieisha Kotai Bunseki karano Approach (The evolution and change of contingent governance structure in the J-firm system-an approach to presidential turnover and firm performance). Keizai Kenkyu 49 (1998) 97-112 (in Japanese)
27. Morck R., and Nakamura M. Banks and corporate control in Japan. J. Financ. 54 (1999) 319-339
28. Ongena S.R.G., and Smith D.C. What determines the number of bank relationships? Cross country evidence. J. Financ. Intermed. 9 (2000) 26-56
29. Ongena S.R.G., and Smith D.C. Bank relationships: a review. In: Harker P.T., and Zenios S.A. (Eds). Performance of Financial Institutions: Efficiency, Innovation, Regulation (2000), Cambridge University Press, Cambridge 221-258
30. Prowse S.D. Institutional investment patterns and corporate financial behavior in the U.S. and Japan. J. Financ. Econ. 27 (1990) 43-66
31. Rajan R.G. Insiders and outsiders: the choice between informed and arm's length debt. J. Financ. 47 (1992) 1367-1400
32. Sharpe S.A. Asymmetric information, bank lending, and implicit contracts: a stylized model of customer relationships. J. Financ. 45 (1990) 1069-1087
33. Sheard P. The main bank system and corporate monitoring and control in Japan. J. Econ. Behav. Org. 11 (1989) 399-422
34. Sheard P. Bank executives on Japanese corporate boards. Bank Jpn. Monet. Econ. Stud. 12 (1994) 85-121
35. Sheard P. Reciprocal delegated monitoring in the Japanese main bank system. J. Jpn. Int. Econ. 8 (1994) 1-21
36. Sheard P. Main banks and the governance of financial distress. In: Aoki M., and Patrick H. (Eds). The Japanese Main Bank System: Its Relevance for Developing and Transforming Economies (1994), Oxford University Press, Oxford 188-230
37. Shleifer A., and Vishny R.W. A survey of corporate governance. J. Financ. 52 (1997) 737-783
38. Shockley R., and Thakor A.V. Bank loan commitment contracts: data theory and test. J. Money Credit Bank. 29 (1998) 517-534
39. Volpin, P.F., 2000. Ownership structure, banks, and private benefits of control. IFA Working Paper FIN 322, London Business School.
40. Von Rheinbaben J., and Ruckes M. The Firm's Optimal Number of Bank Relationships and the Extent of Information Disclosure (1998), Mimeo, University of Mannheim
41. Weinstein D.E., and Yafeh Y. On the cost of a bank-centered financial system: evidence from the changing main bank relations in Japan. J. Financ. 53 (1998) 635-672
42. Yosha O. Information disclosure costs and the choice of financing source. J. Financ. Intermed. 4 (1995) 3-20