November 30, 2015, 14:00-16:00  Venue:CIGS Meeting Room3

CIGS Workshop "Financial System and Fund Allocation: Historical Experience and Present Issues" (Mr. Tetsuji Okazaki and Mr. Daisuke Miyakawa)

On November 30, 2015, CIGS held a workshop of Mr. Tetsuji Okazaki, Research Director of CIGS and Mr. Daisuke Miyakawa, Associate Professor of Hitostubashi University.

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(Mr. Okazaki, Mr. Miyakawa from the left)

Presenter: Tetsuji Okazaki, Research Director, CIGS / Professor, Graduate School of Economics, The University of Tokyo

Title: "Bank Behavior in Regional Finance and the Development of Regional Industries: The Case of Prewar Fukushima, Japan"

Presentation slides (Japanese):
Presentation slides (Japanese)PDF:1097KB

Presentation outline:
Because of the unstable financial market after World War I, the Japanese financial system experienced a wave of bank mergers, which resulted in an increase in bank scale and the development of branch banking. In this paper, we explored the implications of the expansion of branch banking, using bank-office-level data for Fukushima Prefecture. We found that branch offices that belonged to banks headquartered in other cities, counties, or prefectures tended to have a lower propensity to loan compared with the offices of banks headquartered in the same cities and counties as the offices. We also find that concentration of deposits on bank offices headquartered in other cities, counties, or prefectures had a substantial negative impact on the development of the weaving industry. The structural change in the banking industry after World War I altered the spatial allocation of funds and thereby affected the development of regional industries.

Presenter: Daisuke Miyakawa, Associate Professor, The Graduate School of International Corporate Strategy, Hitotsubashi University

Title: "Capital Supply Channel through Venture Capitals: Evidence from Matched Data"

Presentation slides:
Presentation slidesPDF:664KB

Presentation outline:
This paper examines the impact of venture capital firms' (VCs) characteristics on VCs' capital (i.e., fund) supply and how such an impact is interacted with the dynamics of public equity markets. To this end, we use a unique dataset consisting of around 6,000 pairs of venture companies and VCs match-level dataset in Japan, which covers around 2,600 unlisted companies and 600 VCs. This panel dataset allows us to control for companies' time-varying unobservable capital demand, so that we can identify the effects of VCs' characteristics on their capital supply and how such effects vary as public equity markets fluctuate. The estimation results indicate that VCs with larger past investment experiences tend to supply more capital to their portfolio companies. Furthermore, such an impact of VCs' experience on the capital supply became larger when public equity market was in its downturn. We also confirm that omitting fund demand leads to substantial overestimation of these impacts.

CIGS Workshop is a presentation of the progress for the study which CIGS researchers are doing. They take comments from other researchers, advisors, and outside commentators, and they make use of them for their future study.