Masami Imai

Political Determinants of Government Loans in Japan

This paper examines the political determinants of government banks’ lending decisions using prefecture‐level panel data on Japan’s government loans from 1975 to 1992. It finds that the size of government loans is positively correlated with two political factors: (1) the electoral vulnerability of politicians who belong to the ruling Liberal Democratic Party (LDP) and (2) their seniority. These political effects are statistically robust to the inclusion of prefecture fixed effects, year fixed effects, and other socioeconomic factors and, more important, are present only in government loans, and not in private loans. These results suggest that self‐interested LDP members (ab)used government loans for political purposes as implied by the “political view” of government banks.

Japan’s financial regulatory responses to the global financial crisis

Purpose - – This paper aims to understand Japan’s financial regulatory responses after the global financial crisis and recession. Japan’s post-crisis reactions show two seemingly opposing trends: collaboration with international organizations to strengthen the regulation to maintain financial stability, and regulatory forbearance for the banks with troubled small and medium enterprise [SME] borrowers. The paper evaluates the responses by the Japanese financial regulators in five areas (Basel III, stress tests, over-the-counter [OTC] derivatives regulation, recovery and resolution planning and banking policy for SME lending) and concludes that the effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Design/methodology/approach - – This report evaluates the post-crisis responses by the Japanese financial authorities in five dimensions (Basel III, stress tests, OTC derivatives regulations, recovery and resolution planning and bank supervision). Findings - – The effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Originality/value - – The paper is the first attempt to evaluate the financial regulatory trends in Japan after the global financial crisis.

The Effects of Ethnic Chinese Minority on Vietnam's Regional Economic Development in the Post-Vietnam War Period

Abstract This paper examines the impact of the Hoa, an ethnically Chinese, economically dominant minority, on regional economic development in Vietnam. To address the endogeneity of the geographical distribution of the Hoa, we use an important historical episode: the rapid deterioration in Sino-Vietnamese diplomatic relationship that led many ethnic Chinese to flee abroad, particularly to the refugee camps in the Guangxi province of China, in 1979. We find that the effects of proximity to the refugee camps on the share of ethnic Chinese in 1989 were more pronounced for provinces that had a larger presence of the ethnic Chinese population in 1979. We also find strong correlations between the 1989 share of ethnic Chinese (instrumented) and contemporary indicators of economic performance. The results suggest that the ethnic Chinese minority had positive economic impacts on Vietnam’s regional economies and that the post-Vietnam War exodus of ethnic Chinese was likely to have had long-term negative economic impacts.