Abstract

http://ssrn.com/abstract=471477
 
 

Citations (196)



 


 



The Role of Banks in Reducing the Costs of Financial Distress 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); Federal Reserve Bank of Chicago

David S. Scharfstein


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

September 1990

NBER Working Paper No. w3435

Abstract:     
This paper explores the idea that financial distress is costly because free-rider problems and information asymmetries make it difficult for firms to renegotiate with their creditors in times of distress. We present evidence consistent with this view by showing Japanese firms with financial structures in which free-rider and information problems are likely to be small perform better than other firms in industrial groups-those with close financial relationships to their banks, suppliers, and customers-invest more and sell more after the onset of distress than non-qroup firms. Moreover, firms that are not group members, but nevertheless have strong ties to a main bank also invest and sell more than firms without strong bank ties.

Number of Pages in PDF File: 41

working papers series





Download This Paper

Date posted: January 7, 2008  

Suggested Citation

Hoshi, Takeo and Kashyap, Anil K. and Scharfstein, David S., The Role of Banks in Reducing the Costs of Financial Distress in Japan (September 1990). NBER Working Paper No. w3435. Available at SSRN: http://ssrn.com/abstract=471477

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)
Federal Reserve Bank of Chicago ( email )
230 South LaSalle Street
Chicago, IL 60604
United States
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
Feedback to SSRN


Paper statistics
Abstract Views: 441
Downloads: 42
Citations:  196

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.375 seconds