Bank Distress and Productivity of Borrowing Firms: Evidence from Japan
Fumio Akiyoshi and
Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)
We investigate the effects of bank distress on productivity of borrowing firms using micro data on listed companies in Japanese manufacturing industry during the 1990s. We find some evidence suggesting that deterioration in financial health of banks, like a decline in capital-asset-ratio, decreased productivity of their borrowers during the period of FY1994-1996. Although huge nonperforming loans had been a serious problem in Japanese economy since the collapse of asset prices bubble in 1991, resolution of the problem was postponed during the early 1990s. The Japanese economy plunged into serious banking crisis from 1997 to 1999. Our finding is consistent with the hypothesis that forbearance lending by banks that was prevalent during the early 1990s lowered the aggregate productivity of the economy.
Pages: 27 pages
New Economics Papers: this item is included in nep-ban, nep-eff, nep-fdg and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:07014
Access Statistics for this paper
More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().