On the costs of a bank-centered financial system: evidence from the changing main bank relations in Japan

Article Abstract:

We examine the effects of bank-firm relationships on firm performance in Japan. When access to capital markets is limited, close bank-firm ties increase the availability of capital to borrowing firms, but do not lead to higher profitability or growth. The cost of capital of firms with close bank ties is higher than that of their peers. This indicates that most of the benefits from these relationships are appropriated by the banks. Finally, the slow growth rates of bank clients suggest that banks discourage firms from investing in risky, profitable projects. However, liberalization of financial markets reduces the bank's market power. (Reprinted by permission of the publisher.)

Performance, Commercial banks, Japan, Financial markets

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Multiple versus single banking relationships: theory and evidence

Article Abstract:

The author examines ratios for optimum banking relationship profitability. Topics include refinancing, internal problems, and prediction models.

Methods, Management, Finance, Corporations, Corporate finance, Financial management, Commercial loans

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Firm size and cyclical variations in stock returns

Article Abstract:

The authors reexamine risks involved with investments in small firms. Topics include stock returns, credit markets, recession.

Economics, Research and Development in the Social Sciences and Humanities, Analysis, Evaluation, Investments, Credit market, Credit markets

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