A Comparative Study on Regional Finance in Japan and Korea: Evidence from Three Questionnaires

24 Pages Posted: 31 Oct 2009

See all articles by Nobuyoshi Yamori

Nobuyoshi Yamori

Kobe University - Research Institute for Economics & Business Administration

Hitoshi Hirakawa

Nagoya University

Yong-Ho Choi

Kyungpook National University

Byung-yong Jin

Daegu Bank

Gi-duck Bu

Daegu Bank

Man Bong Park

Nagoya University

Date Written: October 29, 2009

Abstract

In this paper, to analyze the similarities and differences between the regional finance of Japan and South Korea (hereinafter, “Korea”), we compared questionnaires to small to midsize companies located in Korea’s Daegu/Gyeongbuk region with questionnaires to small to midsize companies located in Japan’s Kansai and Tokai regions. From the results, we were able to confirm that regional finance systems in Japan and Korea are very similar. For example, in the US, there is an overwhelming amount of small to midsize companies with only one partner bank, however, in Japan and Korea, having multiple partner banks is the norm. Therefore, the practice of having multiple partner banks should not be considered as being unique to Japan, rather, it can be inferred that such a phenomenon is natural in certain social, economical, and legal systems. Contrastingly, we found various differences between Japan and Korea. For example, in response to the question on the assessment of financial institutions, Korea firms gave the most positive assessment for “provision of funds,” whereas Japanese firms gave the most positive assessment for “knowledge on your companies.” These differences can be understood as the causes of the discrepancy between Japan and Korea in the level of economic development.

Keywords: Japan, Korea, SME Finance, Regional Banking

JEL Classification: G21, G32

Suggested Citation

Yamori, Nobuyoshi and Hirakawa, Hitoshi and Choi, Yong-Ho and Jin, Byung-yong and Bu, Gi-duck and Park, Man Bong, A Comparative Study on Regional Finance in Japan and Korea: Evidence from Three Questionnaires (October 29, 2009). Available at SSRN: https://ssrn.com/abstract=1496322 or http://dx.doi.org/10.2139/ssrn.1496322

Nobuyoshi Yamori (Contact Author)

Kobe University - Research Institute for Economics & Business Administration ( email )

2-1, Rokkodai cho
Nada-ku
Kobe, 657-8501
Japan

Hitoshi Hirakawa

Nagoya University

Furo-cho, Chikusa-ku
Nagoya-City, 4648601
Japan

Yong-Ho Choi

Kyungpook National University

Korea, Republic of (South Korea)

Byung-yong Jin

Daegu Bank

China

Gi-duck Bu

Daegu Bank

China

Man Bong Park

Nagoya University

Furo-cho, Chikusa-ku
Nagoya-City, 4648601
Japan

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