The Main Bank System and Corporate Investment: An Empirical Reassessment

25 Pages Posted: 14 Jun 2000 Last revised: 15 May 2021

See all articles by Fumio Hayashi

Fumio Hayashi

National Graduate Institute for Policy Studies; GRIPS

Date Written: September 1997

Abstract

This paper examines whether the sensitivity of corporate investment to internal funds depends on the firm's access to a main bank, using the sample of Japanese manufacturing firms constructed by Hayashi and Inoue (1991). For either of two classifications of firms by their access to a main bank, there is no evidence that main bank ties mitigate the sensitivity of investment to the firm's liquidity. The large effect of main bank ties reported in Hoshi, Kashyap, and Scharfstein (1991) is most likely due to the relatively poor quality of their capital stock estimate.

Suggested Citation

Hayashi, Fumio, The Main Bank System and Corporate Investment: An Empirical Reassessment (September 1997). NBER Working Paper No. w6172, Available at SSRN: https://ssrn.com/abstract=225930

Fumio Hayashi (Contact Author)

National Graduate Institute for Policy Studies ( email )

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Japan

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GRIPS ( email )

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Tokyo 106-8677, Tokyo 106-8677
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