RIEB Seminar
| Date&Time | Friday, August 1, 2014, 3:00pm- |
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| Place | Meeting Room at RIEB (Annex, 2nd Floor) |
| Intended Audience | Faculties, Graduate Students, and People with Equivalent Knowledge |
| Language | Japanese |
| Note | Copies of the paper will be available at Office of Promoting Research Collaboration. |
3:00pm-
| Speaker | Koji TAKAHASHI |
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| Affiliation | Department of Economics, University of California San Diego |
| Topic | Real Effects of the End of Bank-borrower Relationships: Evidence from a Loan-level Data |
| Abstract | Using a matched data of Japanese lending banks and their borrowing firms in 1990s and 2000s, we examine the real effect of terminations of lending-borrowing relationships on firms' performance. We show that the termination of a relationship significantly decreases the investment of the borrowing firm in the first half of 2000s. This implies that suffering from their bad assets after the collapse of the bubble economy, Japanese banks cut off the relationships with firms, which constrained the investments of the borrowing firms. Moreover the effect of terminations is not persistent; the effect disappears in a year after the termination. Our finding coincides with the result of the existing theoretical models with financial frictions where firms are not necessarily able to find lending banks without any costs in bank loan markets and this friction amplifies the adverse shocks by contracting investments in the economy. |