Listing and Financial Constraints

Kenichi Ueda, Akira Ishide and Yasuo Goto

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We confirm, with a twist, that listing on a stock exchange can mitigate the financial constraints of firms, using Japanese firm-level data over the period 1995-2014, controlling for main bank relationships and majority owner influence. Compared to a similar unlisted firm, a listed firm has a lower marginal product of capital and more new borrowings during recessions. Theoretically, we argue that these are the most important variables to uncover differential financial frictions between listed and unlisted firms. However, on average, listed firms do not borrow more over time, but rather maintain lower leverage to mitigate the borrowing constraints.

Pages: 23 pages
Date: 2017-06
New Economics Papers: this item is included in nep-bec and nep-sbm
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https://www.rieti.go.jp/jp/publications/dp/17e090.pdf (application/pdf)

Related works:
Journal Article: Listing and financial constraints (2019)
Working Paper: Listing and Financial Constraints (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:17090

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