Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-01T21:12:26.509Z Has data issue: false hasContentIssue false
  • English
  • Français

Institutions, Competition, and Capital Market Integration in Japan

Published online by Cambridge University Press:  01 March 2009

Kris James Mitchener  and
Mari Ohnuki
Kris James Mitchener*
Affiliation:
Associate Professor, Department of Economics, Santa Clara University and NBER, 500 El Camino Real, Santa Clara, CA 95053. E-mail: kmitchener@scu.edu.
Mari Ohnuki*
Affiliation:
Associate Director, History and Archive Section, Institute for Monetary and Economic Studies, Bank of Japan, Tokyo 103–8660, Japan. E-mail: mari.oonuki@boj.or.jp.
Get access Rights & Permissions [Opens in a new window]

Abstract

Using a newly constructed panel data set, which includes annual estimates of lending rates for 47 Japanese prefectures, we analyze why interest rates converged over the period 1884–1925. We find evidence that technological innovations and institutional changes played an important role in creating a national capital market in Japan. In particular, the diffusion in the use of the telegraph, the growth in commercial branch banking networks, and the development of Bank of Japan's branches reduced interest rate differentials. Bank regulation appears to have played little role in impeding financial market integration.

Type
ARTICLES
Information
The Journal of Economic History , Volume 69 , Issue 1 , March 2009 , pp. 138 - 171
Copyright
Copyright © The Economic History Association 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Asai, Yoshio. 1910–1920 Nendai ni Okeru Shiten Ginko Seido no Tenkai to Toshi Kin'yu Shijou [Development of Branch Banking and Financial Markets in Cities, 1910–1920.] Seijo University, Economic Research Paper 59/60 (1978): 307–40.Google Scholar
Asakura, Kokichi. Meiji Zenki Nihon Kin'yu Kozo shi [History of Japanese Monetary Structure in Early Meiji Period]. Tokyo. Iwanami Shoten, 1961.Google Scholar
Bank of Japan, . Nihon Ginko Hyakunen-shi dai 1 kan [Bank of Japan: The First Hundred Years], vol. 1. Tokyo: Bank of Japan, 1982.Google Scholar
Bank of Japan, . Nihon Ginko Hyakunen-shi Shiryo-hen [Bank of Japan: The First Hundred Years-Materials]. Tokyo: Bank of Japan, 1986.Google Scholar
Bank of Japan, Research Department, . Nihon Kin'yu-shi Shiryo Meiji Taishohen dai 6 kan, dai 10 kan [Materials on Japanese Monetary History, Meiji and Taisho Periods], vols. 6 and 10. Tokyo: Bank of Japan, 1957.Google Scholar
Bank of Japan, Research Department, . Nihon Kin'yu-shi Shiryo Meiji Taishohen dai 4 kan, dai 11 kan [Materials on Japanese Monetary History, Meiji and Taisho Periods], vols. 4 and 11. Tokyo: Bank of Japan, 1958.Google Scholar
Bernhofen, Daniel M., and Brown, John C.. “A Direct Test of the Theory of Comparative Advantage: The Case of Japan.” Journal of Political Economy 112, no. 1 (2004): 48–67.CrossRefGoogle Scholar
Bernhofen, Daniel M., and Brown, John C.. “An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan.” American Economic Review 95, no. 1 (2005): 208–25.CrossRefGoogle Scholar
Bodenhorn, Howard. “A More Perfect Union: Regional Interest Rates in the United States, 1880–1960.” In Anglo-American Financial Systems: Institutions and Markets in the Twentieth Century, edited by Bordo, Michael D. and Sylla, Richard, 415–54. Burr Ridge, IL: Irwin Professional Publishing, 1995.Google Scholar
Bodenhorn, Howard. State Banking in Early America: A New Economic History. New York: Oxford University Press, 2003.Google Scholar
Bodenhorn, Howard, and Rockoff, Hugh. “Regional Interest Rates in Antebellum America.” In Strategic Factors in Nineteenth-Century Economic History: A Volume to Honor Robert Fogel, edited by Goldin, Claudia and Rockoff, Hugh, 159–87. Chicago: University of Chicago Press, 1992.Google Scholar
Bordo, Michael D., Eichengreen, Barry, and Irwin, Douglas A.. “Is Globalization really Different than Globalization a hundred years ago?” NBER Working Paper No. 7195, Cambridge, MA, June 1999.Google Scholar
Carlson, Mark, and Mitchener, Kris James. “Branch Banking as a Device for Discipline: Competition and Bank Survivorship During the Great Depression.” NBER Working Paper No. 12938, Cambridge, MA, February 2007.Google Scholar
Davis, Lance. “The Investment Market: the Evolution of a National Market.” This Journal 25, no. 3 (1965): 355–99.Google Scholar
Eichengreen, Barry. “Mortgage Interest Rates in the Populist Era.” American Economic Review 74, no. 5 (1984): 995–1015.Google Scholar
Fujii, Nobuyuki. “Meijizenki niokeru Dempo no Chiikiteki Riyou Joukyou” [The Use of Telegraph by Region in the Early Meiji Era]. In Kindai Nihon to Jouhou [Modern Japan and Information], edited by Nihon Kenkyu Kai, Kindai, 138–56. Tokyo: Yamakawa Shuppansha, 1990.Google Scholar
Fujii, Nobuyuki. Terekomu no Keizaishi [A History of Telecommunications from an Economic Viewpoint]. Tokyo: Keiso Shobo, 1998.Google Scholar
Fujii, Nobuyuki. Tsushin to Chiikishakai [Communications and Regions]. Tokyo: Nihonkeizai Hyoronsha, 2005.Google Scholar
Good, David F. “Financial Integration in Late-Nineteenth-Century Austria.” This Journal 37, no. 4 (1977): 890–910.Google Scholar
Goto, Shinichi. Hompo Ginko Godoshi Zoho Kaiteiban [History of Consolidation of Japanese Banks]. Tokyo: Kinyuzaiseijijou Kenkyukai, 1973.Google Scholar
Imuta, Toshimitsu. “Nihon Kin'yu Kozo no Saihensei to Chiho Ginko” [Reformation of the Japanese Financial Structure and Regional Banks]. In Ryo Taisenkan ni okeru Kin'yu Kozo [Financial Structure during the Interwar Period], edited by Asakura, Kokichi, 3–114. Tokyo: Ochanomizu Shobo, 1980.Google Scholar
Ishii, Kanji. Jouhou Tsushin no Shakaishi [Social History of Information and Communication]. Tokyo: Yuhikaku, 1994.Google Scholar
James, John A. “Banking Market Structure, Risk, and the Pattern of Local Interest Rates in the United States, 1893–1911.” Review of Economics and Statistics 58, no. 4 (1976): 453–62.CrossRefGoogle Scholar
James, John A. “The Development of the National Money Market.” This Journal 36, no. 4 (1976): 878–97.Google Scholar
James, John A., and Weiman, David F.. “The Political Economy of the U.S. Monetary Union: The Civil War Era as a Watershed.” American Economic Review, Papers and Proceedings 97, no. 2 (2005): 271–75.Google Scholar
Japan Business History Institute, . Mitsui Ginko Shiryo 2 Shitencho Kaigi Kiroku [Mitsui Bank Materials 2: Records of Branch Managers Meetings]. Tokyo: Zaidan Hojin Nihon Keieishi Kenkyusho, 1977.Google Scholar
Kamiyama, Tsuneo. “Zaisei Seisaku to Kinyu Kouzou”[Financial Policy and Financial Structure]. In Nihon Keizaishi 2 Sangyo Kakumeiki [Japanese Economic History 2: Industrial Revolution Period], edited by Ishii, Kanji, Hara, Akira, and Takeda, Haruhito, 61–109. Tokyo: University of Tokyo Press, 2000.Google Scholar
Kasuya, Makoto. “Nihon ni okeru Yokin Ginko no Keisei Katei–Shiharai Junbi wo Chushin toshite” [The Process of Establishing Deposit Banks in Japan–Focus on Cash Reserves]. Shakai Kagaku Kenkyu [Socioscientific Research] 43, no. 4 (1991): 85–244.Google Scholar
Kasuya, Makoto. “Kinyuseido no Keisei to Ginko Jourei/Chochikuginko Jourei” [Formation of Monetary System and Bank Law/Savings Bank Law]. In Kin'yu Kiki to Kakushin [Financial Crisis and Innovation], edited by Ito, Masanao, Tsurumi, Masayoshi, and Asai, Yoshio, 1–35. Tokyo: Nihon Keizai Hyoronsha, 2000.Google Scholar
Levine, Ross. “Finance and Growth: Theory and Evidence.” In Handbook of Economic Growth, edited by Aghion, Philippe and Durlauf, Steven, 865–934. New York: Elsevier, 2005.Google Scholar
Lewis, Kenneth A., and Yamamura, Kozo. “Industrialization and Interregional Interest Rate Structure: The Japanese Case, 1889–1925. Explorations in Economic History 8, no. 4 (1971): 473–99.CrossRefGoogle Scholar
Ministry of Finance, . Dai 12ji Ginkokyoku Nempo [Twelfth Annual Report of the Banking Bureau of the Ministry of Finance]. Tokyo: Ministry of Finance, 1889.Google Scholar
Ministry of Finance, . Dai 21ji Ginkokyoku Nempo [Twenty-First Annual Report of the Banking Bureau of the Ministry of Finance]. Tokyo: Ministry of Finance, 1896.Google Scholar
Mitchener, Kris James, and Ohnuki, Mari. “Capital Market Integration in Japan.” Monetary and Economic Studies 25, no. 2 (2007): 129–53.Google Scholar
Bunko, Mitsui. Mitsui Jigyoushi Hompen dai 2 kan [History of Mitsui business]. Vol. 2. Tokyo: Mitsui Bunko, 1980.Google Scholar
Miyajima, Shigeki, and Weber, Warren E.. “A Comparison of National Banks in Japan and the United States between 1872 and 1885.” Monetary and Economic Studies 19, no. 1 (2001): 31–48.Google Scholar
Miyamoto, Matarou. Kinsei Nihon no Shijo Keizai [The Market Economy in Tokugawa, Japan]. Tokyo: Yuhikaku, 1988.Google Scholar
Mukai, Yurio. “Kin'yu Gyo no Tenkai” [Development of the Financial Business] In Fukuokaken-shi Tsushi-hen Kindai Sangyo Keizai 2 [Chronological History of Fukuoka Prefecture, Modern Industry and Economy], edited by Nihon Bunka Kyokai, Nishi, vol. 2, 933–1070. Fukuoka: Nishi Nihon Bunka Kyokai, 2000.Google Scholar
Tokei Kyokai, Nihon. Nihon Choki Tokei Soran Dai Yon-kan [Historical Statistics of Japan]. vol. 4. Tokyo: Nihon Tokei Kyokai, 1987.Google Scholar
Kin'yu Shinbunsha, Nikkei and Kinyushi Kenkyukai, Chihou. Nihon Chihou Kinyu Shi [Local Monetary History in Japan]. Tokyo: Nihon Keizai Shinbunsha, 2003.Google Scholar
Ohnuki, Mari. “The Bank of Japan Network and Financial Market Integration: From the Establishment of the Bank of Japan until the Early Twentieth Century.” Monetary and Economic Studies 25, no. 1 (2007): 95–125.Google Scholar
Okada, Kazunobu. “Futsuu Ginko Seido no Kakuritsu” [Development of the Commercial Banks System]. In Nihon no Ginko Seido Kakuritsu Shi-Nihon Kin'yu Shijou Hattatsu Shi II [History of the development of the Banking System in Japan II–History of the Development of Market in Japan], edited by Keizai Kenkyusho, Kin'yu, 45–191. Tokyo: Toyokeizai Shinposha, 1966.Google Scholar
Okada, Kazunobu. Chiho Ginko Shiron [History of Regional Banks]. Tokyo: Nihon Keizai Hyoronsha, 2001.Google Scholar
Okazaki, Tetsuji. “Branch banking and money flow of Mitsubishi bank, 1928–1942.” Bulletin of Mitsubishi Research Institute of Historical Materials 3 (2002): 1–29.Google Scholar
Okazaki, Tetsuji, and Sawada, Michiru. “Effects of a Bank Consolidation Promotion Policy: Evaluating Bank Law in 1927 Japan.” CIRJE Discussion Paper F-400, Tokyo, Japan, February 2006.CrossRefGoogle Scholar
Rockoff, Hugh. “Regional Interest Rates and Bank Failures.” Explorations in Economic History 14, no. 1 (1977): 90–95.CrossRefGoogle Scholar
Rousseau, Peter L. “Finance, Investment, and Growth in Meiji-era Japan.” Japan and the World Economy 11, no. 2 (1999):185–98.CrossRefGoogle Scholar
Smiley, Gene. “Interest Rate Movements in the United States, 1888–1913.” This Journal 35, no. 3 (1975): 591–620.Google Scholar
Snowden, Kenneth. “Mortgage Rates and American Capital Market Development in the Late Nineteenth Century.” This Journal 47, no. 3 (1987): 671–91.Google Scholar
Stigler, George. “Imperfections in the Capital Market.” Journal of Political Economy 75, no. 3 (1967): 113–22.CrossRefGoogle Scholar
Stigler, George, and Sherwin, Robert A.. “The Extent of the Market.” Journal of Law and Economics 28, no. 3 (1985): 555–85.CrossRefGoogle Scholar
Sugiyama, Kazuo. “Kokuritsu Ginko no Tokeiteki Kosatsu” [Statistical Views on the National Banks]. In Meiji zenki no Ginko seido [Banking System in Early Meiji Period], edited by Seiichi, Tohata and Taizo, Takahashi, 3–51. Toyo Keizai Shinpo sha, 1965.Google Scholar
Sugiyama, Shinya. “Jouhou Kakumei” [Information Revolution]. In Sangyouka no Jidai Ge-Nihonkeizaishi 5 [Industrialization Age-Japanese Economic History 5], edited by Nishikawa, Shunsaku and Yamamoto, Yuzo, 134–65. Tokyo: Iwanamishoten, 1990.Google Scholar
Sushka, Mary E., and Barrett, Brian W.. “Banking Structure and the National Capital Market, 1869–1914.” This Journal 44, no. 2 (1984): 463–77.Google Scholar
Sussman, Nathan, and Yafeh, Yisheh. “Institutions, Reforms, and Country Risk: Lessons from Japanese Government Debt in the Meiji Period.” This Journal 60, no. 2 (1999): 442–67.Google Scholar
Sylla, Richard. “Federal Policy, Banking Market Structure, and Capital Mobilization in the United States, 1863–1913.” This Journal 29, no. 4 (1969): 657–86.Google Scholar
Takahashi, Korekiyo. Takahashi Korekiyo Jiden Gekan [Memoirs of Takahashi Korekiyo]. vol. 2. Tokyo: Chuo Koronsha, 1976.Google Scholar
Tamaki, Norio. Nihon Kin'yu-shi [Financial History of Japan]. Tokyo: Yuhikaku Sensho, 1994.Google Scholar
Teranishi, Juro. Nihon no Keizaihatten to Kinyuu [Japanese Economic Development and Finance]. Tokyo: Iwanami Shoten, 1982.Google Scholar
Teranishi, Juro. Nihon no Keizai Shisutemu [The Japanese Economic System]. Tokyo: Iwanami Shoten, 2003.Google Scholar
Teranishi, Juro. The Evolution of Economic Systems in Japan. Cheltenham, U.K.: Edward Elgar, 2005.CrossRefGoogle Scholar
Tsurumi, Masayoshi. “Daiichiji Taisen Kinri Kyoutei to Toshi Kin'yu Shijou” [Interest Rate Agreements during World War I and Its Impact on the Financial Market in the City] Kin'yu Keizai [Monetary Economics] 1 (1981): 1–50.Google Scholar
Tsurumi, Masayoshi. Nihon Shin'yo kikou no Kakuritsu [Establishment of a Credit System in Japan]. Tokyo: Yuhikaku, 1991.Google Scholar
Williamson, Jeffrey G.Late-Nineteenth-Century Economic Development: A General Equilibrium History. London: Cambridge University Press, 1974.Google Scholar
Yamamura, Kozo. “Nihon ni okeru Touitsuteki Shihon Shijou no Seiritsu, 1889–1925.” [Integration of the capital market in Japan]. Shakai Keizaishi Gaku [Socioeconomic History] 35, no. 5–6 (1970): 58–85.Google Scholar