Bank monitoring and the maturity structure of Japanese corporate debt issues

Jun Cai*, Stephen Y L Cheung, Vidhan K. Goyal

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

16 Citations (Scopus)


Extant literature suggests that bank lending results in greater information production and control over corporate borrowers. We show that bank lending creates positive externalities in that it improves the contracting environment for other public debt providers. Focusing on the maturity structure of Japanese corporate debt issues, we provide evidence that a higher proportion of bank debt results in public debt of longer maturity. More importantly, the sensitivity of the debt maturity to bank debt ratio is significantly higher for independent firms compared with that of keiretsu-affiliated firms. The evidence is consistent with keiretsu firms having less agency costs of debt compared with independent firms.

Original languageEnglish
Pages (from-to)229-250
Number of pages22
JournalPacific Basin Finance Journal
Issue number3-4
Publication statusPublished - Aug 1999

Scopus Subject Areas

  • Finance
  • Economics and Econometrics

User-Defined Keywords

  • Agency costs
  • Bank monitoring
  • Debt maturity
  • G21
  • G32
  • G38
  • Japanese corporate finance


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