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Financial Turbulence and the Japanese Main Bank Relationship

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  • Mark Spiegel
  • Nobuyoshi Yamori

Abstract

Under the Japanese "main bank" relationship, an individual bank holds equity in a firm and plays a leading role in a firm decision-making and financing. This may leave a firm dependent on its main bank for financing due to the information advantage it enjoys over other potential leaders. While alternative sources of finance and financial liberalization may heve mitigated this dependency, the dependency may resurface during episodes of financial turbulence. We examine the sensitivity of returns on portfolio of equity of Japanese firms to the returns of their main banks using three factors arbitrage-pricing model.
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Suggested Citation

  • Mark Spiegel & Nobuyoshi Yamori, 2003. "Financial Turbulence and the Japanese Main Bank Relationship," Journal of Financial Services Research, Springer;Western Finance Association, vol. 23(3), pages 205-223, June.
    • Handle: RePEc:kap:jfsres:v:23:y:2003:i:3:p:205-223
    DOI: 10.1023/A:1024619628714
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    1. Mark Spiegel & Nobuyoshi Yamori, 2003. "Financial Turbulence and the Japanese Main Bank Relationship," Journal of Financial Services Research, Springer;Western Finance Association, vol. 23(3), pages 205-223, June.
    2. Brewer, Elijah III & Genay, Hesna & Hunter, William Curt & Kaufman, George G., 2003. "The value of banking relationships during a financial crisis: Evidence from failures of Japanese banks," Journal of the Japanese and International Economies, Elsevier, vol. 17(3), pages 233-262, September.
    3. Yu, Y., 2014. "Essays on relationship banking," Other publications TiSEM f3d56b9e-e79e-46c4-bd42-4, Tilburg University, School of Economics and Management.
    4. Cargill, Thomas F. & Parker, Elliott, 2002. "Asian finance and the role of bankruptcy: a model of the transition costs of financial liberalization," Journal of Asian Economics, Elsevier, vol. 13(3), pages 297-318.
    5. Kazuo Yoshida & Yutaka Horiba, 2012. "Determinants of Defined-Contribution Japanese Corporate Pension Coverage," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 2, pages 33-47, December.
    6. Steven Ongena & Yuejuan Yu, 2017. "Firm Industry Affiliation and Multiple Bank Relationships," Journal of Financial Services Research, Springer;Western Finance Association, vol. 51(1), pages 1-17, February.
    7. Thomas F. Cargill & Elliott Parker, 2001. "Asian finance and the role of bankruptcy," Pacific Basin Working Paper Series 2001-01, Federal Reserve Bank of San Francisco.
    8. G. De Masi & Y. Fujiwara & M. Gallegati & B. Greenwald & J. E. Stiglitz, 2009. "An Analysis of the Japanese Credit Network," Papers 0901.2384, arXiv.org, revised Nov 2010.

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    More about this item

    Keywords

    Japan; banking; main bank.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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