From early spring to late summer in 2010 I investigated the financing behavior
of Japanese firms with over \20 million in paid-in capital, using firm-level financial
data from Hojin Kigyo Tokei Kiho (Corporate Enterprise Quarterly Statistics) of the
Ministry of Finance. "A Study of Financing Behavior of Japanese Firms with
Firm-Level Data from Corporate Enterprise Quarterly Statistics ? 1994~2009", divided
into five discussion papers, constitutes the report. This Introduction and Summary
forms the first of the five papers. The other four papers are:
[I]. The Low "Bank-Dependence Ratio" and the Further Increase in the "Independence
of Firms from Banks", CIRJE-J-223.
[II]. The Reality of Short-term Shocks like the "Credit Crunch" of 1997-1999 and the
"Financial Crisis" of 2007, and the Effectiveness of "Emergency" Economic
Measures ? A Follow-up to Miwa , CIRJE-J-224.
[III]. The Reality of Trade Credit and its Link to Bank Borrowing and Inventory: (1)
Overall Discussion and Preliminary Investigation, CIRJE-J-225.
[IV]. The Reality of Trade Credit and its Link to Bank Borrowing and Inventory: (2)
Correlation Coefficients and Multiple Regressions, CIRJE-J-226.
This Statistics collects quarterly financial data from about 20,000 randomly
sampled non-financial firms in 5 size-categories, most of which are unlisted small
businesses. Using firm-level data in 1994-2009, I investigate the financing behavior of
the firms in Japan during "the Lost Two Decades." I explore the reality of the "Credit
Crunch" of 1997-1999 and the "Financial Crisis" of 2007, the effectiveness of the policy
measures adopted, and the effect of the "zero-interest-rate, quantity easing" monetary
The most surprising finding is that the ratio of zero-short-term-borrowing was
the highest, 50% in 1998 and two-thirds in 2008, among the smallest firms. The
average (short-term bank borrowing)/(total asset) ratio was also lowest among this
group. This "Independence from Banks" is a fundamental challenge to the basic premise
of the conventional wisdom about the Japanese financial market and corporate finance.