 The Evolving Japanese Financial System, and the Cost of CapitalNo 233170, Center for International and Development Economics Research (CIDER) Working Papers from University of California-Berkeley, Department of Economics Abstract: The paper surveys the extensive literature on whether Japanese corporations in the 1980s were able to finance investment more easily than Americans. Along the way, it considers: the leverage of Japanese firms, dividend payout, equity price/earnings ratios, corporate taxation, cross-ownership, speculative bubbles, international capital mobility, the lower cost of financing investment internally and through "main bank" relationships, and the move to a more market-oriented system as these relationships, and the move to a more market-oriented system as these relationships appeared to break down in the 1980s. The conclusion that emerges from the literature is that the cost of finance in the 1980s was indeed lower in Japan than in the United States, by a variety of measures. But trends of domestic and international liberalization, followed by the events of 1990-92, have now raised the cost of capital in Japan to the U.S. market level. Some unanswered questions remain, regarding the reported shifts in reliance by firms between banking relationships versus securities markets. Keywords: International; Development (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbewp:233170 Access Statistics for this paper More papers in Center for International and Development Economics Research (CIDER) Working Papers from University of California-Berkeley, Department of Economics Contact information at EDIRC. |
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