Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5102276 | Pacific-Basin Finance Journal | 2017 | 45 Pages |
Abstract
Japan's Lost Decades (失ããã20å¹´) present a unique opportunity to study firm behavior during a period of prolonged economic distress. This paper demonstrates that lessons learnt in “normal” conditions apply to firms in economies in extremis. Japanese firms relied on internally generated funds and precautionary cash holdings to reduce their debt. We document considerable growth in nearly-all-equity firms: 7.5% in 1990 to 28.3% in 2014. We also document that Japan's Lost Decades are associated with firms having low market-to-book ratios. Firms' leverage is lower, however, only when market-to-book values are unequivocally high.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Joye Khoo, Robert B. Durand,