Corporate Financing and Governance in Japan: The Road to the Future [Paperback]

Takeo Hoshi (Author), Anil K Kashyap (Author), Stanley Fischer (Foreword)

Book Description

Publication Date: January 31, 2004 | ISBN-10: 0262582481 | ISBN-13: 978-0262582483

In this book Takeo Hoshi and Anil Kashyap examine the history of the Japanese financial system, from its nineteenth-century beginnings through the collapse of the 1990s that concluded with sweeping reforms. Combining financial theory with new data and original case studies, they show why the Japanese financial system developed as it did and how its history affects its ongoing evolution.The authors describe four major periods within Japan's financial history and speculate on the fifth, into which Japan is now moving. Throughout, they focus on four questions: How do households hold their savings? How is business financing provided? What range of services do banks provide? And what is the nature and extent of bank involvement in the management of firms? The answers provide a framework for analyzing the history of the past 150 years, as well as implications of the just-completed reforms known as the "Japanese Big Bang."Hoshi and Kashyap show that the largely successful era of bank dominance in postwar Japan is over, largely because deregulation has exposed the banks to competition from capital markets and foreign competitors. The banks are destined to shrink as households change their savings patterns and their customers continue to migrate to new funding sources. Securities markets are set to re-emerge as central to corporate finance and governance.

Editorial Reviews

Review

"This book is a fascinating analysis of the past, present, and future of the Japanese financial system. It sheds a great deal of light on Japan's current troubles and their potential solution."--Ben S. Bernanke, Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs, Princeton University

"Hoshi and Kashyap crystallize much of their high-quality research in this book. Corporate Financing and Government in Japan tells of the rise and fall of banking dominance over Japanese corporations with historical accounts, economic theory, and summaries of empirical analysis. The book will be an authoritative read for a wide-ranging audience, including college students, MBA students, and scholars in the field."--Takatoshi Ito, Professor, Hitotsubashi University

"Hoshi and Kashyap are most reliable students of the Japanese financial system, and the publication of their book is extremely timely and welcome. Corporate Financing and Governance in Japan places the present Japanese crisis in a historical perspective using rich historical data and interesting case studies, provides its diagnosis with advanced analytical concepts, and thoughtfully lays out a possible future course for the Japanese system. It is a pleasantly readable, informative, and insightful book."--Masahiko Aoki, Professor Emeritus, Stanford University, and President-Elect, the International Economic Association

"This book provides insightful accounts of the turbulent institutional transformations in Hungary and of the evolution of contemporary economic thought--both of which the author himself has been actively engaged in. It may also be read as a treatise on the ethics and psychology of scientific creation by a leading social science scholar of our time."--Masahiko Aoki, Professor Emeritus, Stanford University, and President-Elect, the International Economic Association

About the Author

Takeo Hoshi is Professor of Economics in the Graduate School of International Relations and Pacific Studies at the University of California, San Diego.

Anil K Kashyap is Edward Eagle Brown Professor of Economics and Finance and Richard N. Rossett Faculty Fellow at the University of Chicago Booth School of Business. He is the coauthor of Corporate Financing and Governance in Japan: The Road to the Future (MIT Press, 2001).

Stanley Fischer is Governor of the Bank of Israel. First Deputy Managing Director of the International Monetary Fund from 1994 to 2001, Fischer is the author of IMF Essays from a Time of Crisis: The International Financial System, Stabilization, and Development (MIT Press, 2004).

Product Details

• Paperback: 378 pages
• Publisher: The MIT Press (January 31, 2004)
• Language: English
• ISBN-10: 0262582481
• ISBN-13: 978-0262582483
• Product Dimensions: 6 x 0.8 x 9 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #1,440,436 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

6 of 9 people found the following review helpful

3.0 out of 5 stars Japanese corporate finance December 17, 2003

By Paul Donovan

Format:Hardcover

Hoshi and Kashyap provide an interesting history of the post war corporate finance, with relevant information from the pre-war period that sets the tone. Their analysis includes comprehensive and illustrative data with sources on various aspects of the development of Japan's corporate finance arrangements. Although their exposition of the decline of the Keiretsu system is relatively detailed, it is this section that lets the book down. The role of capital market reforms on the small company-large company relationship in the Keiretsu families is glossed over, yet this surely has to be examined in more detail given the damage this wrought on small businesses and the subsequent contribution of this damage to the non-performing loan problems of the banking system. The chapters detailing the problems of the banking system also seem rather cursory given the scale of the crisis.

These weaknesses notwithstanding, the book provides a useful reference to the topic, and covers the background of Japan's corporate finance development with some helpful data insights.