The Japanese Main Bank Relationship: Governance or Competitive Strategy?

  • Mark J. Scher


This article explores the nature of the main bank in its roles as the major creditor and lender of last resort to its clients within Japanese banking’s cultural, historical and institutional context, and in relation to governmental institutions that strive to foster economic development through the main bank system. In so doing it discloses some of the myriad formal and informal systems which the main bank uses to structure a profitable and lasting relationship with its client firms, the nature of the direct rewards sought by the banks, and how their needs are served by the main bank relationship.


Corporate Governance Financial Institution Financial Distress Social Transformation Lending Bank 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Aoki Masahiko. (1990). “Toward an Economic Model of the Japanese Firm,” Journal of Economic Literature 28 (March): 1–27.Google Scholar
  2. Aoki Masahiko. (1994). “Monitoring Characteristics of the Main Bank System: An Analytical and Developmental View,” in M. Aoki and H. Patrick, eds. The Japanese Main Bank System: Its Relevancy for Developing and Transforming Economies. New York: Oxford University Press.Google Scholar
  3. Fuji Sogo Kenkyujo. (1993). ‘Main bank system oyobi kabushiki’ ni tsuite no chosa, (An investigation regarding the influence of shareholding on the main bank system). Research report. Tokyo.Google Scholar
  4. Horiuchi Akiyoshi. (1989). “Informational Properties of the Japanese Financial System,” Japan and the World Economy, 1(3): 255–78.CrossRefGoogle Scholar
  5. Horiuchi Akiyoshi. (1995). “Financial Sector Reforms in Postwar Japan.” Unpublished paper October 1995.Google Scholar
  6. Horiuchi Akiyoshi, and Fukuda Shin’ichi (1987). “Nihon no mainbank wa dono yohna yakuwari wo hatashitaka” (What Was the Role of the Japanese Main Bank System?), Nihon Ginko Kinyu Kenkyujo Kinyu Kenkyu 6(3): 1–28.Google Scholar
  7. Horiuchi Akiyoshi, and Okazaki Ryoko. (1992). “Capital Markets and the Banking Sector: The Efficiency of Japanese Banks in Reducing Agency Costs.” Discussion Paper 92-F-6 Research Institute for the Japanese Economy, Faculty of Economics, University of Tokyo.Google Scholar
  8. Horiuchi Akiyoshi, F. Packer, and S. Fukuda. (1988). “What Role Has the Main Bank Played in Japan,” in Journal of the Japanese and International Economies, 2, 159–80.CrossRefGoogle Scholar
  9. Hoshi Takeo, A. Kashyap, and D. Scharfstein. (1990a). “Bank Monitoring and Investment: Evidence from the Changing Structure of Japanese Corporate Banking Relationships” in R. Glenn Hubbard, ed. Asymmetric Information, Corporate Finance, and Economic Development. Chicago: University of Chicago Press pp. 105–26.Google Scholar
  10. Hoshi Takeo, A. Kashyap, and D. Scharfstein. (1990b). “The Role of Banks in Reducing Costs of Financial Distress in Japan,” in Journal of Financial Economics, 27: 67–88.CrossRefGoogle Scholar
  11. Hoshi Takeo, A. Kashyap, and D. Scharfstein. (1991). “Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups,” Quarterly Journal of Economics, 106: 33–60.CrossRefGoogle Scholar
  12. Kang Jun-Koo and Anil Shivdasani. (1995). “Firm Performance, Corporate Governance, and Top Executive Turnover in Japan” Journal of Financial Economics 38, 29–58.CrossRefGoogle Scholar
  13. Kaplan, Steven N. and Bernadette A. Minton. (1994). “Appointments of Outsiders to Japanese Boards: Determinants and Implications for Managers” Journal of Financial Economics 36, 225–58.CrossRefGoogle Scholar
  14. Miwa Yoshiro. (1985). “Mainbank to sono kinou” (The Function of Main Banks) in Y. Kosai and S. Nishikawa eds. Nihon Keizai Sistemu. Tokyo: University of Tokyo Press, pp. 170–99.Google Scholar
  15. Miwa Yoshiro. (1991). “Mainbank to Nihon no shihon shijo” (Main Banks and Japanese Capital Markets) Zenginkyo Kin’yu, August 11–19.Google Scholar
  16. Nakatani Iwao. (1983). “Kigyo shudan no keizaiteki imi to ginko no yakuwari,” (The Economic Significance of the Enterprise Groups and the Role of Banks) Kin’yu Keizai 202: 51–75.Google Scholar
  17. Nakatani Iwao. (1984). “The Economic Role of Financial Corporate Grouping” in M. Aoki ed. The Economic Analysis of the Japanese Firm, 227–58. Amsterdam: North-Holland: Elsevier.Google Scholar
  18. Nomura Sogo Kenkyujo. (1992). “Nihon kigyo no corporate governance” (Corporate Governance of Japanese Companies), Zaikai Kansoku, Sept.Google Scholar
  19. Oba Ryoko, and Horiuchi Akiyoshi. (1991). “Honpo kigyo no mainbank kankei to setsubi toshi kodo no kankei ni tsuite” (On the Relationship Between Our Country’s Corporate Main Bank System and Capital Expenditure Behavior), Nihon Ginko Kinyu Kenkyujo Kinyu Kenkyu 9(4): 23–50. December.Google Scholar
  20. Okazaki Ryoko, and Horiuchi Akiyoshi. (1992). “Kigyo no setsubi toshi to mainbank kankei” (The Relationship Between the Main Bank and Corporate Capital Expenditure) Nihon Ginko Kinyu Kenkyujo Kinyu Kenkyu 11(1): 37–59. March.Google Scholar
  21. Omura Kei’ichi. (1993). Kabushiki mochiai no ishiki kozo (How Companies Consider Cross-Shareholding) Report of International Finance Group, Keiei Academy, Tokyo.Google Scholar
  22. Scher, Mark J. (1997). Japanese Interfirm Networks and Their Main Banks, London: Macmillan.Google Scholar
  23. Sheard, Paul. (1989). “The Main Bank System and Corporate Monitoring and Control in Japan,” in Journal of Economic Behavior. 11: 399–422.CrossRefGoogle Scholar
  24. Sheard, Paul. (1991). “The Economics of Interlocking Shareholding,” Ricerche Economiche, 45: 421–48.Google Scholar
  25. Sheard, Paul. (1994). “Interlocking Shareholdings and Corporate Governance” in M. Aoki and R. Dore eds. The Japanese Firm, Sources of Competitive Strength, New York: Oxford University Press, pp. 310–49.CrossRefGoogle Scholar

Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1997

Authors and Affiliations

  • Mark J. Scher

There are no affiliations available

Personalised recommendations