Working Paper: NBER ID: w23715
Authors: Takeo Hoshi; Satoshi Koibuchi; Ulrike Schaede
Abstract: Using a unique dataset on all major corporate restructuring events in Japan between 1981 and 2010, we examine how bank-led rescue operations in Japan have changed over time. The incidence of restructuring by distressed firms has become less frequent after the 1990s. When firms undergo restructuring, they adopt real adjustments in terms of labor, assets and finance, but the intensity of these adjustments has also declined over time. In line with existing research, we interpret these findings as strong indicators of changing corporate governance in Japan, in particular in terms of the decline in corporate monitoring functions of main banks.
Keywords: corporate restructuring; bank-led restructuring; Japan; corporate governance
JEL Codes: G21; G34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bank-led restructuring (F65) | performance outcomes (L25) |
| completion of restructuring episodes (G33) | positive performance outcomes (L25) |
| main bank's role in corporate governance (G38) | intensity of restructuring measures (L16) |
| economic stagnation (P27) | decline in restructuring frequency (L16) |
| distress status (H84) | probability of restructuring (C69) |