Financial Intermediation and Late Development: The Case of Meiji Japan, 1868 to 1912

John Tang

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Was nineteenth century Japan an example of finance-led growth? Using a new panel dataset of startup firms from the Meiji Period (1868-1912), I test whether financial sector development influenced the emergence of modern industries. Results from multiple econometric models suggest that increased financial intermediation, particularly from banks, is associated with greater firm establishment. This corresponds with the theory of late development that industrialization requires intermediaries to mobilize and allocate financing. The effect is pronounced in the second half of the period and for heavy industries, which may be due to improved institutions and larger capital requirements, respectively.

Keywords: Financial intermediation; late development; industrialization; Japan (search for similar items in EconPapers)
JEL-codes: N15 N25 O16 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2008-01
New Economics Papers: this item is included in nep-ban and nep-his
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https://www2.census.gov/ces/wp/2008/CES-WP-08-01.pdf First version, 2008 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:08-01

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