TY - JOUR
T1 - Financial constraints of firms and bank characteristics
AU - Nozawa, Wataru
AU - Managi, Shunsuke
N1 - Funding Information:
We thank Kenji Tanaka and other participants at the IFABS Asia 2017 Ningbo China Conference and the 2017 Fall Meeting of the Japanese Society of Monetary Economics. This research is supported by MEXT, Japan Grant-in-Aid for Specially Promoted Research JP26000001.
Publisher Copyright:
© 2019 Economic Society of Australia, Queensland
PY - 2019/12
Y1 - 2019/12
N2 - There are a variety of institutional lenders in capital markets, such as banks or credit unions. Using the panel data of Japanese firms, we evaluate banks and credit unions based on their borrowers’ cash-flow sensitivity of investments, which is a measure of borrowers’ financial constraints. Our findings suggest that credit unions are doing better than banks in loosening the financial constraints of small and, in particular, middle-aged firms. We then discuss some potentially socially desirable policy interventions. We further contribute to the literature on firms’ financial constraints by estimating investment-cash-flow sensitivity using a sample that has not been analyzed.
AB - There are a variety of institutional lenders in capital markets, such as banks or credit unions. Using the panel data of Japanese firms, we evaluate banks and credit unions based on their borrowers’ cash-flow sensitivity of investments, which is a measure of borrowers’ financial constraints. Our findings suggest that credit unions are doing better than banks in loosening the financial constraints of small and, in particular, middle-aged firms. We then discuss some potentially socially desirable policy interventions. We further contribute to the literature on firms’ financial constraints by estimating investment-cash-flow sensitivity using a sample that has not been analyzed.
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U2 - 10.1016/j.eap.2019.10.002
DO - 10.1016/j.eap.2019.10.002
M3 - Article
AN - SCOPUS:85073698680
SN - 0313-5926
VL - 64
SP - 302
EP - 316
JO - Economic Analysis and Policy
JF - Economic Analysis and Policy
ER -