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The Decline in Bank-Led Corporate Restructuring in Japan: 1981-2010

Author

Listed:
  • Takeo Hoshi
  • Satoshi Koibuchi
  • Ulrike Schaede
Abstract
Using a unique dataset on all major corporate restructuring events in Japan between 1981 and 2010, we examine how bank-led rescue operations in Japan have changed over time. The incidence of restructuring by distressed firms has become less frequent after the 1990s. When firms undergo restructuring, they adopt real adjustments in terms of labor, assets and finance, but the intensity of these adjustments has also declined over time. In line with existing research, we interpret these findings as strong indicators of changing corporate governance in Japan, in particular in terms of the decline in corporate monitoring functions of main banks.

Suggested Citation

  • Takeo Hoshi & Satoshi Koibuchi & Ulrike Schaede, 2017. "The Decline in Bank-Led Corporate Restructuring in Japan: 1981-2010," NBER Working Papers 23715, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:23715
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    References listed on IDEAS

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    1. IZUMI Atsuko & KWON Hyeog Ug, 2015. "Change in Corporate Performance after Forcing Out CEOs: Comparison between the United States and Japan (Japanese)," Discussion Papers (Japanese) 15032, Research Institute of Economy, Trade and Industry (RIETI).
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    Cited by:

    1. Fukuda, Shin-ichi & Kasuya, Munehisa & Nakajima, Jouchi, 2018. "The role of corporate governance in Japanese unlisted companies," Japan and the World Economy, Elsevier, vol. 47(C), pages 27-39.
    2. Chim M. Lau & Ulrike Schaede, 2020. "Of substitutes and complements: trade credit versus bank loans in Japan, 1980–2012," Review of Quantitative Finance and Accounting, Springer, vol. 55(1), pages 305-326, July.
    3. Kitagawa, Norio, 2021. "Macroeconomic uncertainty and management forecast accuracy," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(3).
    4. Jiang, Jinglu & Liu, Bo & Yang, Jinqiang, 2019. "The impact of debt restructuring on firm investment: Evidence from China," Economic Modelling, Elsevier, vol. 81(C), pages 325-337.
    5. Nakamura, Jun-ichi, 2023. "A 50-year history of “zombie firms” in Japan: How banks and shareholders have been involved in corporate bailouts?," Japan and the World Economy, Elsevier, vol. 66(C).
    6. Tomeczek, Artur F., 2022. "The evolution of Japanese keiretsu networks: A review and text network analysis of their perceptions in economics," Japan and the World Economy, Elsevier, vol. 62(C).
    7. Ono, Arito & Suzuki, Katsushi & Uesugi, Iichiro, 2024. "When banks become pure creditors: The effects of declining shareholding by Japanese banks on bank lending and firms’ risk-taking," Journal of Financial Stability, Elsevier, vol. 73(C).

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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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