Economics at your fingertips  

Financial turbulence and the Japanese main bank

Mark Spiegel () and Nobuyoshi Yamori ()

No 2000-04, Pacific Basin Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: The Japanese \\"main bank\\" relationship, under which a bank holds equity in a firm and plays a leading role in its decision-making and financing, may leave a firm dependent on its main bank for financing due its information advantage over other potential lenders. While alternative sources of finance may mitigate this dependency, it may resurface during episodes of financial turbulence. ; We examine the sensitivity of returns on portfolios of Japanese firm equity to the returns of their main banks using a three-factor arbitrage-pricing model. We find no significant dependence on main bank returns when coefficient values are constrained to remain constant over the entire sample. However, the data strongly suggest a structural break subsequent to the last quarter of 1997, a turbulent period for Japanese financial markets. When a structural break is introduced, main bank sensitivity increases after the break, usually to significantly positive levels.

Keywords: Banks and banking - Japan; Finance (search for similar items in EconPapers)
Date: 2000, Revised 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link) (application/pdf)

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:

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Pacific Basin Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2020-07-31
Handle: RePEc:fip:fedfpb:2000-04