The choice of financing with public debt versus private debt: New evidence from Japan after critical binding regulations were removed

Shirasu, Yoko; Xu, Peng

doi:10.1016/j.japwor.2006.06.002

Cited by 16 publications

(6 citation statements)

References 48 publications

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“…However, firms have incentives to reduce their dependency on their banks because close bank-firm relationships can cause hold-ups through an information monopoly (Sharpe, 1990; Rajan, 1992; Houston and James, 1996; Weinstein and Yafeh, 1998;Pinkowitz and Williamson, 2000). Certainly, after the financial liberalization in the 1980s, the structure of corporate finance in Japan changed dramatically and a number of firms began issuing bonds (Shirasu and Xu, 2007).…”

Section: Introductionmentioning

confidence: 99%

Bank dependence and financial constraints on investment: Evidence from the corporate bond market paralysis in Japan

Uchino

2013

Journal of the Japanese and International Economies

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This paper investigates the causal relationship between firms' bank dependence and financial constraints by utilizing the 2008 financial crisis and its impact on the Japanese economy as a natural experiment. Since the Japanese banking sector remained healthy while the corporate bond markets were paralyzed, firms that had reduced bank dependence were hit heavily by the shock. I examined whether firms with large holdings of corporate bonds maturing in 2008 were financially constrained, by comparing the changes in their investment expenditures and borrowing conditions with those of bank-dependent firms. The main empirical results show that (1) firms with large holdings of corporate bonds maturing in 2008 did not cut investment expenditures; (2) instead, they observed higher increments in bank loans; and (3) firms that maintained relatively close bank-firm relationships had more access to bank loans with low borrowing costs, but significant differences in investment expenditures were not found. These findings imply that although there is a cost to reducing bank dependence, it is not very high for Japanese listed firms.

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Section: Introductionmentioning

confidence: 99%

Bank dependence and financial constraints on investment: Evidence from the corporate bond market paralysis in Japan

Uchino

2013

Journal of the Japanese and International Economies

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“…In line with previous research, Arena and Howe (2009) also found that companies that have better credit quality in the leverage ratio and outstanding subordinated debt, are more likely to make loans from banks than to issue debt. Shirasu and Xu (2007) found that good quality Japanese companies had left the bank and switched to the bond market, while lowquality companies turned towards bank debt. Banks in Japan tend to lend to large companies.…”

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confidence: 99%

The Analysis of Company Decisions in Choosing Sukuk and Bonds Using Logit Model

Pribadi

Wibowo

2019

Economica

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Sukuk has become one of alternative financing for corporate. The development of Sukuk provides the flexibility choices of company’s funding decisions that required their needs and capabilities. Sukuk market in Indonesia is the second largest in emerging East Asia in terms of size but the number of issued Sukuk lower than a conventional bond. This study aims to obtain empirical evidence that the characteristics of the company influence the decision of the company in issuing Sukuk and bonds using the logit model. The results of this study conclude: (1) leverage has a negative influence and significant (2) size of the firm has a positive influence and significant (3) fixed assets has a positive influence and significant to the decision of the company in issuing Sukuk.

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“…Indeed, Fischer (2000) documented a significant positive relationship between a return on assets ratios and the probability of going public on the alternative stock market in Germany. Additionally, Shirasu and Xu (2007) find that high quality or high growth Japanese firms tend to access the public bond market, while low quality or low-growth firms use more bank debt. In contrast, Albornoz and Pope (2004) show that profitability is negatively related to the decision to go public in the UK.…”

Section: H2bmentioning

confidence: 91%

“…Standard errors are given in parentheses. 2000-20122007-20122007-20122009-20122009-20122000-20122007-20122007-20122009-20122009-2012 0.007*** 0.010*** 0.010*** 0.012*** 0.012*** 0.017*** 0.021*** 0.021*** 0.020*** 0.021** 596.5*** 447.3*** 458.6*** 245.1*** 256.9*** 287.3*** 279.9*** 286.9*** 169.0*** 182.8*** Note:: The firms' profitability is estimated using a random-effects model. The constant and industry group dummies were included in all regressions but are not shown.…”

Section: Tablementioning

confidence: 99%

Issuing Bonds, Shares or Staying Private? Determinants of Going Public in an Emerging Economy

et al. 2014

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The Warsaw Stock Exchange is one of Europe's largest exchanges by the number of IPOs, although it retains features of a market in post-transition countries, including a relatively small size, shallowness and a weak institutional framework. In this study, we use a large dataset to explore firms' decisions to issue equity on the main or alternative market and debt on the bond market. We observe that in general, larger, more profitable firms are more likely to go public, although in contrast to developed economies, these firms tend to be younger. Moreover, we find that current market valuation positively affects the decision to go public on the main market, and we establish that highly leveraged companies are more likely to issue either shares on the alternative market or bonds. At the same time, however, we observe that firms issuing shares on the alternative market are most likely to manipulate their profitability prior to going public.

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The choice of financing with public debt versus private debt: New evidence from Japan after critical binding regulations were removed

Cited by 16 publications

References 48 publications

Bank dependence and financial constraints on investment: Evidence from the corporate bond market paralysis in Japan

Bank dependence and financial constraints on investment: Evidence from the corporate bond market paralysis in Japan

The Analysis of Company Decisions in Choosing Sukuk and Bonds Using Logit Model

Issuing Bonds, Shares or Staying Private? Determinants of Going Public in an Emerging Economy

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