Skip navigation
Hardcover | Out of Print | 378 pp. | 6 x 9 in | 20 illus. | August 2001 | ISBN: 9780262083010
Paperback | $32.00 Short | £26.95 | 378 pp. | 6 x 9 in | 20 illus. | January 2004 | ISBN: 9780262582483
Mouseover for Online Attention Data

Look Inside

Instructor Resources

Corporate Financing and Governance in Japan

The Road to the Future
Foreword by Stanley Fischer


In this book, Takeo Hoshi and Anil Kashyap examine the history of the Japanese financial system, from its nineteenth-century beginnings through the collapse of the 1990s that concluded with sweeping reforms. Combining financial theory with new data and original case studies, they show why the Japanese financial system developed as it did and how its history affects its ongoing evolution.

The authors describe four major periods within Japan's financial history and speculate on the fifth, into which Japan is now moving. Throughout, they focus on four questions: How do households hold their savings? How is business financing provided? What range of services do banks provide? And what is the nature and extent of bank involvement in the management of firms? The answers provide a framework for analyzing the history of the past 150 years, as well as implications of the just-completed reforms known as the "Japanese Big Bang."

Hoshi and Kashyap show that the largely successful era of bank dominance in postwar Japan is over, largely because deregulation has exposed the banks to competition from capital markets and foreign competitors. The banks are destined to shrink as households change their savings patterns and their customers continue to migrate to new funding sources. Securities markets are set to re-emerge as central to corporate finance and governance.

About the Authors

Takeo Hoshi is Professor of Economics in the Graduate School of International Relations and Pacific Studies at the University of California, San Diego.

Anil K Kashyap is Edward Eagle Brown Professor of Economics and Finance and Richard N. Rossett Faculty Fellow at the University of Chicago Booth School of Business. He is the coauthor of Corporate Financing and Governance in Japan: The Road to the Future (MIT Press, 2001).


“This book is a fascinating analysis of the past, present, and future of the Japanese financial system. It sheds a great deal of light on Japan's current troubles and their potential solution.”
Ben S. Bernanke, Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs, Princeton University
“Hoshi and Kashyap crystallize much of their high-quality research in this book. Corporate Financing and Government in Japan tells of the rise and fall of banking dominance over Japanese corporations with historical accounts, economic theory, and summaries of empirical analysis. The book will be an authoritative read for a wide-ranging audience, including college students, MBA students, and scholars in the field.”
Takatoshi Ito, Professor, Hitotsubashi University
“Hoshi and Kashyap are most reliable students of the Japanese financial system, and the publication of their book is extremely timely and welcome. Corporate Financing and Governance in Japan places the present Japanese crisis in a historical perspective using rich historical data and interesting case studies, provides its diagnosis with advanced analytical concepts, and thoughtfully lays out a possible future course for the Japanese system. It is a pleasantly readable, informative, and insightful book.”
Masahiko Aoki, Professor Emeritus, Stanford University, and President-Elect, the International Economic Association


45th Nikkei Prize for Excellent Books in Economic Science, presented by the Japan Center for Economic Research and Nihon Keizai Shimbun Inc. on November 5, 2002, 2002