TY - JOUR
T1 - Main bank relationships and capital structure in Japan
AU - Fukuda, Atsuo
AU - Hirota, Shin'Ichi
PY - 1996/9
Y1 - 1996/9
N2 - In this paper, we argue that the main bank in Japan acts as a quasi-inside monitor of the firm, delegated by other lenders, and that main bank relationships increase the debt capacity of the firm by reducing the agency cost of debt. On the other hand, firms with high debt ratios will strengthen main bank relationships due to the agency problems associated with high leverage. Thus, the debt ratio and main bank relationships are simultaneously determined and have positive effects on each other. The empirical results we obtain support these hypotheses. J. Japan. Int. Econ. September 1996, 10(3), pp. 250-261. Department of Economics, Kyoto Sangyo University, Kamigamo, Kitaku, Kyoto 603, Japan; and Department of Business Administration and Information, Setsunan University, Ikedanakamachi, Neyagawa, Osaka 572, Japan.
AB - In this paper, we argue that the main bank in Japan acts as a quasi-inside monitor of the firm, delegated by other lenders, and that main bank relationships increase the debt capacity of the firm by reducing the agency cost of debt. On the other hand, firms with high debt ratios will strengthen main bank relationships due to the agency problems associated with high leverage. Thus, the debt ratio and main bank relationships are simultaneously determined and have positive effects on each other. The empirical results we obtain support these hypotheses. J. Japan. Int. Econ. September 1996, 10(3), pp. 250-261. Department of Economics, Kyoto Sangyo University, Kamigamo, Kitaku, Kyoto 603, Japan; and Department of Business Administration and Information, Setsunan University, Ikedanakamachi, Neyagawa, Osaka 572, Japan.
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U2 - 10.1006/jjie.1996.0014
DO - 10.1006/jjie.1996.0014
M3 - Article
AN - SCOPUS:0030242222
VL - 10
SP - 250
EP - 261
JO - Journal of the Japanese and International Economies
JF - Journal of the Japanese and International Economies
SN - 0889-1583
IS - 3
ER -