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'By a Silken Thread': regional banking integration and pathways to financial development in Japan's Great Recession

Mathias Hoffmann () and Toshihiro Okubo ()

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: Regional differences in banking integration determined how Japan’s Great Recession after 1990 spread across the country. We explain these differences with the emergence of silk reeling as the main export industry after Japan’s opening to trade in the 19th century. The silk-exporting prefectures developed a system of export finance centered on local, cooperative banks that preserved their dominant local position long after the decline of the silk industry. Our findings suggest that different pathways to financial development can lead to long-term differences in de facto financial integration, even if there are no formal barriers to capital mobility between regions.

Keywords: financial development; financial integration; Japan; Great Recession; Lost Decade; banking integration; regional business cycles; transmission of financial shocks; misallocation of credit; trade credit; export finance; silk industry (search for similar items in EconPapers)
JEL-codes: F15 F30 F40 G01 N15 N25 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-cwa
Date: 2013-06
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Related works:
Working Paper: By a Silken Thread: regional banking integration and pathways to financial development in Japan s Great Recession (2014) Downloads
Working Paper: 'By a Silken Thread': Regional Banking Integration and Pathways to Financial Development in Japan's Great Recession (2013) Downloads
Working Paper: By a Silken Thread: Regional banking integration and pathways to financial development in Japan's Great Recession (2012) Downloads
Working Paper: By a Silken Thread: regional banking integration and pathways to financial development in Japan's Great Recession (2012) Downloads
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