Financial Structure and Bankruptcy Risk in Japanese Companies

Financial structure and the nature of financial risk in Japanese companies differ substantially from those of U.S. firms. As a result, the application of U.S. standards is likely to produce misleading conclusions for creditors, investors and competitors. This article examines the unique institutiona...

Full description

Saved in:
Bibliographic Details
Published in:Journal of international business studies 1985-03, Vol.16 (1), p.97-110
Main Authors: Suzuki, Sadahiko, Wright, Richard W.
Format: Article
Language:English
Subjects:
Bank loans
Banking industry
Bankruptcy
Banks
Borrowing
Business and Management
Business risks
Business Strategy/Leadership
Business structures
Capital structure
Commercial banks
Companies
Debt financing
Equity
Equity funds
Financial accounting
Financial leverage
Financial risk
International Business
Loans
Management
Organization
Ratios
Relations
Risk
Statistical analysis
Stockholders
Stocks
Studies
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Financial structure and the nature of financial risk in Japanese companies differ substantially from those of U.S. firms. As a result, the application of U.S. standards is likely to produce misleading conclusions for creditors, investors and competitors. This article examines the unique institutional relationships and the nature of debt and equity claims that are central to understanding financial risk in Japan. It reports the results of empirical testing of the types of measures that more accurately reflect bankruptcy risk in large Japanese firms. The findings indicate that measures of a company's social importance and the strength of its bank relationship may be more important at financially crucial moments than accounting information. The results are of practical value to foreign creditors and analysts, as well as to researchers.
ISSN:0047-2506
1478-6990
DOI:10.1057/palgrave.jibs.8490444