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Valuation of Japanese Corporations during the 1980s: evidence from an accounting dataset

Author

Listed:
  • Hiroki Arato

    (Japan Society for the Promotion of Science and Graduate School of Economics, Kyoto University)

  • Katsunori Yamada

    (Japan Society for the Promotion of Science and Graduate School of Economics and Graduate School of Economics, Osaka University)

Abstract

This paper applies the framework of McGrattan and Prescott (2005) to the Japanese economy using an accounting dataset. Restricting our attention to the steady growth path in the 1980s, we show that the estimated value of intangible capital in Japan is enormous compared to the U.S. and the U.K. cases. Interestingly, it is also found that when we consider the sub-period of 1987--1989, the so-called bubble period, the price-to-book-value ratio is quite close to one. This finding might imply that the stock price surge during the bubble period was not actually a bubble.

Suggested Citation

  • Hiroki Arato & Katsunori Yamada, 2007. "Valuation of Japanese Corporations during the 1980s: evidence from an accounting dataset," Discussion Papers in Economics and Business 07-45, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0745
    as

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0745.pdf
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    References listed on IDEAS

    as
    1. Hayashi, Fumio & Inoue, Tohru, 1991. "The Relation between Firm Growth and Q with Multiple Capital Goods: Theory and Evidence from Panel Data on Japanese Firms," Econometrica, Econometric Society, vol. 59(3), pages 731-753, May.
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    More about this item

    Keywords

    Intangible capital; Stock prices; Price-to-book-value ratio;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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