Do Bubbles Equally Affect Japanese Bank Performance?
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Published
Mar 1, 2006
Abstract
Japanese banks experienced severe adverse shocks during the post bubble period due to the collapse of the so-called bubble economy. This paper investigates the performance of Japanese bank stocks in the bubble period and post-bubble period. We show in this article that in the case of Japan there is a clearunequal link between bubbles and the post bubble period's bank stock performance. We found that banks that did better during'the bubble period performed worse over the 1990-1998period. This result must be'dependent on the lending behavior of banks during the bubble economy.
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Keywords
Banking
References
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• Granger. C.W.J., 1988. Some recent developments in the concept of causality. Journal of Econometrics, 39, 199-211.
• Ito Takatoshi and Harada Kimie, 2000. Japan Premium and Stock Prices: 1\vo Mirrors of Japanese Banking Crises. NBER Working Paper 7997.
• Ito Takatoshi and Tokuo Iwaisako, 1996. Explaining asset bubbles in Japan. Monetary and Economic studies, Bank of Japan, vol14, 143-193.
• Kenneth R. French and Poterba, James M., 1991. Were Japanese Stock Prices Too High?. Journal of Financial Economics 68, 337-363.
• Kindle berger, C.P., 1995. Asset Inflation and Monetary Policy. Banca N azionale del Lavoro, Quaterly Review 48 (No.182), 17-38.
• Jensen, M.C, 1969. The performance of mutual funds in the period 1945-1964. Journal of Finance 23, 389-416.
• Naok:i Tanaka, 1995. The Japanese economy after the "Bubble". Japanese Economic studies 23,3-35.
• Ogawa Kazuo and Kitasaka Shin-ichi, 2000. Bank lending in Japan: Its determinants and macroeconomic implications, in Takeo Hoshi and Huge Patrick,eds, Crisis and Change in Japanese Financial System, Bosten, Massachusetts: Kluwer Academic Publishers, pp 160- 199.
• Oliver J, Blanchard and Mark W. Watson, 1982. Bubbles, Rational Expectations, and Financial markets. in P. Wachtel, ed., Crises in the Economic and Financial Structure, Lexington Books.
• Peek, Joe and Eric S. Rosengren, 2001. Determinants of Japan premium: Action speak louder than words. Journal of International economics 53, 283-305.
• Peek, Joe and Eric S. Rosengren, 1997. The international transmission of financial shocks: the case of Japan. American Economic Review, 495-505
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• Takeo Hoshi, 2001. What happened to Japanese banks? Monetary an Economic studies, Bank of Japan, February.
• Tamin Bayoumi, 2001. The morning after: explaining the slowdown in Japanese growth in the 1990s. Journal of International Economics 53, 241-259.
• Toshiak:i. Thachibanaki and Asuhiro. Tak:i, 1991. Shareholding and lending activity of Financial Institutions in Japan. BOJ Monetary and Economic Studies, Vol. 9,23-59.
• Ueda, Kazuo, 2000. Causes of Japan's Banking problems in the 1990s, in Takeo Hoshi and Huge Patrick,eds, Crisis and Change in Japanese Financial System, Bosten, Massachusetts: Kluwer Academic Publishers, pp 59-81.
• Asako, Kasumi, Satoru Kanou, and Naofumi Sano, 1990. Stock price and Bubbles: in K.G.Nishimura and Y.Miwa,eds., Nihon no Kabuka Chika, University of Tokyo press {in Japanese).
• Ball, M., 1994. The 1980s property boom. Enviornment and Planning A26, 671-695.
• Barthlomew, P. F., 1994. Comparing Depository Institution Difficulties in Canada, the United States, and the Nordic countries. Journal of Housing Research 5 (2); 303-309.
• Baltagi, B.H, 1980. On seemingly unrelated regressions with error components. Econometrica 48, 1547-1551.
• Black, F.,M.C Jensen and M. Scholes, 1972. The capital asset pricing model: Some empirical tests. in M.C. Jensen,(ed.) Studies in the theory of capital markets, Praegar, New York.
• Brown P, Kleidon A, and Marsh T, 1983. New evidence on the nature of size related anomalies in stock prices, Journal of Financial Economics 12, 33-56.
• D. Stone and William T. Ziemba, 1993. Land and stock prices in Japan. Journal of Economic Perspectives, Vol. 7, 149-165.
• Fama, E.F. and J.D. Macbeth, 1973. Risk, return, and equilibrium: empirical tests. Journal of political economy, 71, 607-636.
• Granger, C.W.J, 1981. Some properties of time series data and their use in econometric model specification. Journal of Econometrics, 16, 121-30.
• Granger. C.W.J., 1988. Some recent developments in the concept of causality. Journal of Econometrics, 39, 199-211.
• Ito Takatoshi and Harada Kimie, 2000. Japan Premium and Stock Prices: 1\vo Mirrors of Japanese Banking Crises. NBER Working Paper 7997.
• Ito Takatoshi and Tokuo Iwaisako, 1996. Explaining asset bubbles in Japan. Monetary and Economic studies, Bank of Japan, vol14, 143-193.
• Kenneth R. French and Poterba, James M., 1991. Were Japanese Stock Prices Too High?. Journal of Financial Economics 68, 337-363.
• Kindle berger, C.P., 1995. Asset Inflation and Monetary Policy. Banca N azionale del Lavoro, Quaterly Review 48 (No.182), 17-38.
• Jensen, M.C, 1969. The performance of mutual funds in the period 1945-1964. Journal of Finance 23, 389-416.
• Naok:i Tanaka, 1995. The Japanese economy after the "Bubble". Japanese Economic studies 23,3-35.
• Ogawa Kazuo and Kitasaka Shin-ichi, 2000. Bank lending in Japan: Its determinants and macroeconomic implications, in Takeo Hoshi and Huge Patrick,eds, Crisis and Change in Japanese Financial System, Bosten, Massachusetts: Kluwer Academic Publishers, pp 160- 199.
• Oliver J, Blanchard and Mark W. Watson, 1982. Bubbles, Rational Expectations, and Financial markets. in P. Wachtel, ed., Crises in the Economic and Financial Structure, Lexington Books.
• Peek, Joe and Eric S. Rosengren, 2001. Determinants of Japan premium: Action speak louder than words. Journal of International economics 53, 283-305.
• Peek, Joe and Eric S. Rosengren, 1997. The international transmission of financial shocks: the case of Japan. American Economic Review, 495-505
• Shanken,J , 1992. On the estimation of beta pricing models. Review of Financial studies 5, 1-33.
• Takeo Hoshi, 2001. What happened to Japanese banks? Monetary an Economic studies, Bank of Japan, February.
• Tamin Bayoumi, 2001. The morning after: explaining the slowdown in Japanese growth in the 1990s. Journal of International Economics 53, 241-259.
• Toshiak:i. Thachibanaki and Asuhiro. Tak:i, 1991. Shareholding and lending activity of Financial Institutions in Japan. BOJ Monetary and Economic Studies, Vol. 9,23-59.
• Ueda, Kazuo, 2000. Causes of Japan's Banking problems in the 1990s, in Takeo Hoshi and Huge Patrick,eds, Crisis and Change in Japanese Financial System, Bosten, Massachusetts: Kluwer Academic Publishers, pp 59-81.
How to Cite
Abdel Azeez, A. A., and Yasuhiro Younezawa. 2006. “Do Bubbles Equally Affect Japanese Bank Performance?”. Studies in Business and Economics 12 (1). https://doi.org/10.29117/sbe.2006.0014.
Section
Articles