Domestic bank health and foreign direct investment

Tatsuo Ushijima

doi:10.1016/j.jjie.2007.11.001

Domestic bank health and foreign direct investment

Tatsuo Ushijima

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

This article provides evidence on the link between Japanese firms' foreign direct investment (FDI) and domestic bank health during the 1990s. Analysis of FDI by 420 industrial firms reveals that financial health of a firm's main bank and non-main banks both positively and significantly relates to the firm's FDI around the globe. The estimated impact of main bank health is smaller than that of non-main banks' financial health, suggesting that close bank-firm ties cushion the impact of bank health deteriorations albeit partially. Regressions also reveal that the sensitivity to domestic bank health varies across firms and investments projects. The variation patterns are consistent with the view that bank health affects FDI by changing the availability of bank credit. J. Japanese Int. Economies 22 (3) (2008) 291-309.

Original language	English
Pages (from-to)	291-309
Number of pages	19
Journal	Journal of The Japanese and International Economies
Volume	22
Issue number	3
DOIs	https://doi.org/10.1016/j.jjie.2007.11.001
Publication status	Published - 2008 Sept
Externally published	Yes

Keywords

Bank health
Banking crisis
FDI
Japan
Main bank finance

ASJC Scopus subject areas

Finance
Economics and Econometrics
Political Science and International Relations

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jjie.2007.11.001

Cite this

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AB - This article provides evidence on the link between Japanese firms' foreign direct investment (FDI) and domestic bank health during the 1990s. Analysis of FDI by 420 industrial firms reveals that financial health of a firm's main bank and non-main banks both positively and significantly relates to the firm's FDI around the globe. The estimated impact of main bank health is smaller than that of non-main banks' financial health, suggesting that close bank-firm ties cushion the impact of bank health deteriorations albeit partially. Regressions also reveal that the sensitivity to domestic bank health varies across firms and investments projects. The variation patterns are consistent with the view that bank health affects FDI by changing the availability of bank credit. J. Japanese Int. Economies 22 (3) (2008) 291-309.

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KW - Banking crisis

KW - FDI

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KW - Main bank finance

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Domestic bank health and foreign direct investment

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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