The Effectiveness of Public Credit Guarantees in the Japanese Loan Market

Iichiro Uesugi, Koji Sakai and Guy M. Yamashiro

Journal of the Japanese and International Economies, 2010, vol. 24, issue 4, 457-480

Abstract: This paper examines the effectiveness of public credit guarantee programs in not only increasing the availability of loans to small and medium enterprises (SMEs), but in also improving the ex-post performance of borrowing firms. Using a unique panel data set, we identify the effects of a massive credit guarantee program implemented by the Japanese government from 1998 to 2001. While we do find that the availability of loans increased for program participants, when loans were provided by undercapitalized banks the increased liquidity persisted for only a few years. Further, the ex-post performance of program participants, with the exception of firms with sizable net worth, deteriorated relative to their non-participating counterparts.

Keywords: Credit; crunch; Loan; guarantees; Matching; estimation; Small; and; medium; enterprises (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0889-1583(10)00032-8
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Effectiveness of Public Credit Guarantees in the Japanese Loan Market (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:24:y:2010:i:4:p:457-480

Access Statistics for this article

Journal of the Japanese and International Economies is currently edited by Takeo Hoshi

More articles in Journal of the Japanese and International Economies from Elsevier
Bibliographic data for series maintained by Catherine Liu ().