بحران بانکی و بهره وری شرکت های وام گیر: شواهد از ژاپن

We investigate the effects of bank distress on the productivity of borrowing firms by using data on listed companies in the Japanese manufacturing industry during the 1990s. We find that deterioration in the financial health of banks, which is measured by a decline in the capital-asset ratio, decreased the productivity of their borrowers during the period of the severe financial crisis (FY1997–1998). Our finding empirically confirms the theoretical view that an increase in financial friction negatively affects the productivity of the corporate sector.

This paper attempts to clarify the effects of bank distress on the productivity of borrowing firms by using data on listed companies in the Japanese manufacturing industry during the 1990s. Many empirical studies conclude that deterioration in the financial health of Japanese banks had adverse effects on the investment of their borrowers during the 1990s (Gibson, 1995, Gibson, 1997, Kang and Stulz, 2000, Nagahata and Sekine, 2005, Fukuda et al., 2005 and Fukuda et al., 2006). However, there is no consensus on whether the productivity of firms was affected by deterioration in the financial health of banks. Ogawa (2007) reports that nonperforming loans at banks had no effects on firms’ investments in research and development that were closely related to the productivity growth of firms. In contrast, Fukuda et al. (2008) report that the productivity of firms declined when unhealthy banks extended long-term loans to the firms. These previous studies encounter common difficulties in dealing with the endogeneity problem related to the financial health of banks: The health of banks is likely to be affected by the productivity of firms. Our study, which solves the endogeneity problem by using valid instruments for bank health, sheds light on the unexplored relationship between the financial health of banks and the productivity of their borrowers.1

We analyze how deterioration in bank health affects the productivity of firms, using data on listed companies in the Japanese manufacturing industry during the 1990s. We find that deterioration in the health of the main bank caused a decrease in the productivity of the borrowers in FY1997–1998 when the Japanese banking system was plunged into a severe crisis. Given that a severe credit crunch occurred in that period, our finding suggests that the banking crisis caused a decline in the productivity of manufacturing firms through the credit crunch. Some studies argue that the evergreening behavior of banks contributed to the decline in the productivity of Japanese firms during the 1990s.27 As Peek and Rosengren (2005) point out, unhealthy banks have an incentive to continue or increase lending to insolvent firms in order to avoid the risk that their bankruptcies would disclose the banks’ loan losses. Caballero et al. (2008) argue that the distorted market competition arising from such forbearance lending can result in the misallocation of labor and capital, which leads to a decline in the firms’ productivity.28 The forbearance lending hypothesis is distinct from but compatible with our argument that a credit crunch caused a decline in the productivity of manufacturing firms. Many empirical studies report that Japanese banks were engaged in forbearance lending to nonmanufacturing firms rather than to manufacturing firms (Sekine et al., 2003 and Caballero et al., 2008). The forbearance lending may have decreased the productivity of nonmanufacturing firms. The effect of bank lending behavior on the productivity of firms can be different for the manufacturing and nonmanufacturing sectors. Further research is needed on this issue.