Does Corporate Lending by Banks and Life Insurance Companies Differ?: Evidence from Japanese Economy in the Early 1980s
31 Pages Posted: 9 Apr 2010
Date Written: April 9, 2010
Comparing loans made by main banks to those made by life insurance companies, we test for the existence of specialization in corporate lending. Using a detailed data set with information on individual loans made in Japan in the early 1980s, we empirically examine credit specialization on the part of lenders by investigating the relationship between the concentration of loans from main banks and those from life insurance companies. Empirical evidence suggests that the amounts of loans made by main bank are negatively associated with those by life insurance companies, which is consistent with the lending characteristics of life insurance companies that are known as “Marginal Lenders”.
Keywords: Main Bank, Keiretsu, Japanese Life Insurance Market, Lending Behavior
JEL Classification: G21, G22
Suggested Citation: Suggested Citation