Financial Intermediation and Late Development: The Case of Meiji Japan, 1868 to 1912

45 Pages Posted: 5 Mar 2008

See all articles by John P. Tang

John P. Tang

ANU Research School of Economics

Date Written: January 1, 2008

Abstract

Was nineteenth century Japan an example of finance-led growth? Using a new panel dataset of startup firms from the Meiji Period (1868-1912), I test whether financial sector development influenced the emergence of modern industries. Results from multiple econometric models suggest that increased financial intermediation, particularly from banks, is associated with greater firm establishment. This corresponds with the theory of late development that industrialization requires intermediaries to mobilize and allocate financing. The effect is pronounced in the second half of the period and for heavy industries, which may be due to improved institutions and larger capital requirements, respectively.

Suggested Citation

Tang, John P., Financial Intermediation and Late Development: The Case of Meiji Japan, 1868 to 1912 (January 1, 2008). US Census Bureau Center for Economic Studies Paper No. CES-08-01, Available at SSRN: https://ssrn.com/abstract=1103086 or http://dx.doi.org/10.2139/ssrn.1103086

John P. Tang (Contact Author)

ANU Research School of Economics ( email )

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Canberra, Australian Capital Territory 0200
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