Bond Underwriting Fees and Keiretsu Affiliation in Japan
Abe De Jong
Erasmus University - Rotterdam School of Management
Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)
Erasmus University, School of Economics; Robeco
Pacific-Basin Finance Journal, Forthcoming
ERIM Report Series Reference No. ERS 2005 038 F&A
We examine fees on bonds issued by Japanese corporations during the 1994-2002 period. Over time, we find that fees have increased for those firms that are related to bank-led (financial) keiretsu, even after controlling for risk factors. During the same period, fees have fallen for firms not belonging to keiretsu. The higher fees for keiretsu firms were not offset by lower yields. It seems that, against the background of bond market deregulation and weaker banks, keiretsu membership has become a burden rather than an advantage.
Number of Pages in PDF File: 48
Keywords: Fees, bonds, keiretsu, corporate groups, banks
JEL Classification: G20, G21, G24, G30Accepted Paper Series
Date posted: April 4, 2006
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