IDEAS home Printed from https://ideas.repec.org/a/cup/jfinqa/v59y2024i8p3959-3993_14.html
   My bibliography  Save this article

Common Lender, Ex-Banker Director, and Corporate Investment

Author

Listed:
  • Asai, Kentaro
  • Hoang, Thao
  • Yamada, Takeshi

Abstract

Due to the government-driven mergers of large banks, many competing firms in Japan ended up borrowing from a common lender. Using firm-level data, we find that the capital investments of competing firms that share a common lender decrease by 15% of the mean. When a common lender can exercise its voice through its former employees serving as firms’ executive directors, investments fall significantly further. Competing firms that share a common lender increase markups and profitability ratios, suggesting that the lender induces strategic coordination among its borrowers to reduce their competitive pressures. Firms use saved resources from weaker competition for cash cushions.

Suggested Citation

  • Asai, Kentaro & Hoang, Thao & Yamada, Takeshi, 2024. "Common Lender, Ex-Banker Director, and Corporate Investment," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 59(8), pages 3959-3993, December.
    • Handle: RePEc:cup:jfinqa:v:59:y:2024:i:8:p:3959-3993_14
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022109023001084/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jfinqa:v:59:y:2024:i:8:p:3959-3993_14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jfq .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.