Corporate Profitability and Stock Valuation in Japan

Masasuke Ide

Financial Analysts Journal, 1996, vol. 52, issue 2, 40-55

Abstract: The coexistence of low corporate profitability and high valuations in the Japanese stock market is seemingly contradictory. The Japanese financial system, which provided low-cost debt and equity capital as a package to major corporations through stable, interlocking relationships between large financial institutions and borrowing companies was, in fact, a hidden key factor for the unprecedented economic success of Japan after World War II. As Japan's economy successfully completes its catch-up phase and enters a mature stage, the traditional financial system is becoming more of a liability than an asset for achieving new economic priorities. Pressures are building to transform the system into one based on purely financial investment emphasizing management efficiency and profitability of borrowing companies. How soon and in what form this transformation will take place remains to be seen.

Date: 1996
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.2469/faj.v52.n2.1979 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:ufajxx:v:52:y:1996:i:2:p:40-55

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ufaj20

DOI: 10.2469/faj.v52.n2.1979

Access Statistics for this article

Financial Analysts Journal is currently edited by Maryann Dupes

More articles in Financial Analysts Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().