作者： bankr

Abstract
We test the existence of adverse selection and moral hazard in financial contracting by examining the choice of borrowers between collateralized and non-collateralized loans. Using comprehensive loan-level data from all loans underwritten by a large public bank in Japan, we examine the borrowers’ behavior before and after the introduction of non-collateralized loans that expand the choice set for borrowers. We find an increase in credit risk for firms that switch to non-collateralized loans after the introduction, which is consistent with moral hazard. In contrast, we find mixed and unclear evidence for the existence of adverse selection.

Creation Date/NO. March 2017 17-E-058
Research Project Study on Corporate Finance and Firm Dynamics

Abstract
This paper demonstrates the adjustment speed of firm working capital and the relationships between working capital and firm performance in Japan during the global financial crisis. Using quarterly firm-level data, we find that the adjustment of working capital was weaker during the crisis. Moreover, the negative relationship between excess working capital and firm performance became more significant during the crisis, especially for larger firms. However, this crisis-related working capital-firm performance effect does not appear to persist for very long, because to finance any excess working capital, firms borrow from banks and reduce their internal cash both during and outside periods of crisis.

Creation Date/NO. March 2017 17-E-045
Research Project Study on Corporate Finance and Firm Dynamics

Abstract
This paper examines the effects of main bank switching on the probability of small business bankruptcy by employing a propensity score matching estimation approach. We use a unique firm-level data set of more than 1,000 small and medium-sized enterprises (SMEs) incorporated in Japan; the firms are young and unlisted SMEs just after incorporation. We find that main bank switching increases the probability of firm bankruptcy. In addition, the result suggests that switching increases the probability of bankruptcy when firms switch to financial institutions with which they have not previously transacted. This result may be because such switching worsens the financial conditions of client firms. We also find that the result holds only when the ex-post main banks are not descendants of their ex-ante main banks.

Creation Date/NO. March 2017 17-E-019
Research Project The Role of Regional Financial Institutions toward Regional Revitalization: How do regional financial institutions contribute to improving the quality of employment in the local economy?

Abstract
In 2008, U.S. demand collapsed and triggered deflation. The U.S. Federal Reserve (Fed) employed large-scale asset purchases (LSAP) to fight deflation. How did news of LSAP affect inflationary expectations? If investors believed that LSAP would raise inflation, they would sell assets exposed to inflation and purchase inflation hedges. This would lower the prices of assets that are exposed to inflation and raise the prices of assets that benefit from inflation. Examining the relationship between asset price changes and inflation sensitivities can thus shed light on how financial markets process LSAP news. The results indicate that initially LSAP announcements lowered expected inflation. Only as inflation approached its target did news of LSAP raise expected inflation.

Creation Date/NO. July 2017 17-E-097
Research Project East Asian Production Networks, Trade, Exchange Rates, and Global Imbalances

Abstract
In Japan, uncertainty over the social security and tax system is termed as a source of stagnant household consumption at the aggregate level. This study presents empirical evidence on this issue by using original survey data of 10,000 individuals. The results indicate that individuals are highly uncertain over the future course of social security policies, and the impacts of such uncertainty on their life are perceived to be large. The policy uncertainty induces increased saving driven by a precautionary motive, and the effect is prominent for low-income individuals. These results suggest that improving long-term predictability in the social security and tax system may contribute toward stimulating household consumption.

Creation Date/NO. May 2017 17-E-075

This is the English version of the Japanese Discussion Paper (17-J-007) with some additional information and changes.

Published: Morikawa, Masayuki, 2019. “Policy uncertainty and saving attitude: Evidence from a survey on consumers,” Journal of Consumer Affairs, Vol. 53(3), pp. 1297-1311