Comparison Between Bank Loans and Other Fund Procurement Methods(in Japanese)

It is often argued that Japan's deteriorated banking sector continues to seriously affect its economy, but few empirical studies support that argument. Still, it is useful to examine the relationship between the weakness of the banking sector and Japan's low economic performance. In this study, we compare the values as information variables of bank loans, money supply (M2+CD) and other fund procurement methods (shares, securities and trade credits) to predict economic fluctuations by using vector autoregression models. The results imply that bank loans include more information to predict economic fluctuations than the other fund procurement methods, and money has a profile comparable to that of bank loans. These results are similar to the preceding study results. When we compare the information values of these variables to predict economic activities of small and medium firms, however, the predictive power of bank loans becomes almost the same as that of the other fund procurement methods, and that of money supply is stronger than that of bank loans. And, predictable power of trade credit exceeds that of bank loans for small and medium firms.