Deregulation, disintermediation, and agency costs of debt: evidence from Japan1

  title={Deregulation, disintermediation, and agency costs of debt: evidence from Japan1},
  author={Craig Dunbar and Vidhan K. Goyal and Bob Hendershott and James E. Hodder and Takeo Hoshi and C Y Hwang and Nararayan Jayaraman and S Kim and Ken Lehn and Gershon Mandelker and A. Maeshiro and Bob Nachtmann and M. L. Petersen and Dick Pettway and Steve Prowse and Shanggeun Rhee and K. Shastri and Anil Shivdasani and Ren{\'e} Stulz and C James and Christopher W. Anderson and Anil K. Makhija},
Many Japanese firms reduced dependence on banks following financial deregulation in the 1980s. The financial architecture of Japanese firms after liberalization provides an opportunity to investigate the choice of financing with public bonds versus monitored bank loans. Examination of accounting and stock price data for a sample of Japanese firms in the late 1980s suggests that debt structure is related to variables that serve as proxies for agency costs of debt. In particular, we find that the… CONTINUE READING
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