Abstract

http://ssrn.com/abstract=227327
 
 

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The Choice between Public and Private Debt: An Analysis of Post-Deregulation Corporate Financing in Japan


Takeo Hoshi


University of California at San Diego; National Bureau of Economic Research (NBER)

Anil K. Kashyap


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

David S. Scharfstein


Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

August 1993

NBER Working Paper No. w4421

Abstract:     
As a result of deregulation, there was a dramatic shift during the 1980s in Japan away from bank debt financing towards public debt financing: in 1975, more than 90% of the corporate debt of public companies was bank debt; in 1992 it was less than 50%. This paper presents a theory of the choice between bank debt and public debt and then examines the theory using firm level data on borrowing sources in Japan. We find that high net worth companies are more prone to use public debt. We also find that the more successful members of industrial groups (or keiretsu) and less successful owner-managed firms tended to access the public debt markets. We offer a number of interpretations of these results in light of the theory.

Number of Pages in PDF File: 47

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Date posted: July 6, 2004  

Suggested Citation

Hoshi, Takeo and Kashyap, Anil K. and Scharfstein, David S., The Choice between Public and Private Debt: An Analysis of Post-Deregulation Corporate Financing in Japan (August 1993). NBER Working Paper No. w4421. Available at SSRN: http://ssrn.com/abstract=227327

Contact Information

Takeo Hoshi (Contact Author)
University of California at San Diego ( email )
9500 Gilman Drive
La Jolla, CA 92093-0519
United States
619-534-5018 (Phone)
619-534-3939 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Anil K. Kashyap
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7260 (Phone)
773 702-0458 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
773-702-7260 (Phone)
773-702-0458 (Fax)
David S. Scharfstein
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-496-5067 (Phone)
617-496-8443 (Fax)
HOME PAGE: http://www.people.hbs.edu/dscharfstein/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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