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The role of long-term loans for economic development : Empirical evidence in Japan, Korea, and Taiwan

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  • The role of long-term loans for economic development
  • Fukuda, Shin-ichi
  • Hitotsubashi University


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Title The role of long-term loans for economic development
Similar Titles
Sub Title

Empirical evidence in Japan, Korea, and Taiwan

Material Type Reports
Author(English)

Fukuda, Shin-ichi

Publisher

Tokyo:Hitotsubashi University

Date 2001-09
Series Title; No CEI Working Paper Series / 2001-13
Pages 41
Subject Country Japan(Asia and Pacific)
South Korea(Asia and Pacific)
Taiwan(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Administration
Economy < Direct Investment
Holding Hitotsubashi University

Abstract

The purpose of this paper is to investigate whether long-term funds had a positive impact on investment in Japan, Korea, and Taiwan. When there exists a possibility of a liquidity shortage, the firm’s investment decision tends to be conservative. Thus, to the extent that the long-term debt makes the liquidity shortage less likely outcome, long-tern loans can have a positive impact on investment. In the first part of this paper, we estimate Tobin’s Q type investment functions of Japanese firms for two different sample periods. In 1972-84, we find that the long-term loan ratio had an additional positive effect on investment. However, in 1985-96, we cannot find that a higher ratio of long-term loans increased the Japanese firm’s investment. (The rest omitted)