Keiretsu Style Main Bank Relationships, R&D Investment, Leverage, and Firm Value : Quantile Regression Approach

Using quantile regression, our results provide explanations for the inconsistent findings that use conventional OLS regression in the extant literature. While the direct effects of RD while firms' advantages with low RD whereas it is decreasing in high Q firms. Main banks add value for low to median Q firms, while the value is destroyed for high Q firms. Meanwhile, we find the interacted effect of the main bank and R&D investment which increases with firm value, only appears in medium quantiles, instead of low or high quantiles. The results of this work provide relevant implications for policymakers. Finally, we document that industry quantile effect is larger than the industry effect itself, given that most of the firms in higher quantiles gain from industry effects while lower quantile firms suffer negative effects. We also find the results of OLS are seriously influenced by outliers. In stark contrast, quantile regression results are impervious to either inclusion or exclusion outliers