We examine quantitatively the extent to which financial distress in the 90s affected Japanese corporate investment. Based on the firm-level data that includes small, unlisted firms, we estimate investment function to measure the impact of financial distress on investment. We find that the...

The purpose of this study is to investigate how firms responded to the deterioration of bank health during the financially turbulent periods in the 2000s in making investment decisions and in meeting demand for liquidity. A rise in uncertainty regarding the ability to obtain external funds may...

An attempt is made to estimate a state space model of investment and borrowing in a Bayesian framework and extract the unobservable agency cost of Japanese firms by firm size. Our estimates of the agency cost exhibited a declining trend in the late 80s and then switched to an increasing trend in...

We examine quantitatively the extent to which financial distress in the 90s affected Japanese corporate investment. Based on the firm-level data that includes small, unlisted firms, we estimate investment function to measure the impact of financial distress on investment. We find that the firm's...