The global financial crisis and small- and medium-sized enterprises in Japan: how did they cope with the crisis?

The global financial crisis and small- and medium-sized enterprises in Japan: how did they cope... In this paper, we examine the nature of the shocks that hit the small- and medium-sized enterprises (SMEs) in Japan during the global financial crisis that occurred in the wake of the massive number of non-performing subprime loans in the U.S. We examine how the SMEs responded to the shocks, using the unique surveys that were conducted by the Research Institute of the Economy, Trade and Industry in 2008 and 2009. The shocks were identified as demand, supply, and financial shocks. The demand shock was the most prevalent of the shocks, while the financial shock was least frequent. The SMEs took a spectrum of measures against the demand shock by seeking help from suppliers and financial institutions. We find that the measures taken by the SMEs crucially depended on the bank–firm relationship as well as the customer–supplier relationship. The bank-dependent SMEs asked their closely-affiliated financial institutions for help, while the SMEs less dependent on financial institutions sought help primarily from their suppliers. A long customer–supplier relationship plays an important role in mitigating the supply shock. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

The global financial crisis and small- and medium-sized enterprises in Japan: how did they cope with the crisis?

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Publisher
Springer US
Copyright
Copyright © 2012 by Springer Science+Business Media, LLC.
Subject
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-012-9434-z
Publisher site
See Article on Publisher Site

Abstract

In this paper, we examine the nature of the shocks that hit the small- and medium-sized enterprises (SMEs) in Japan during the global financial crisis that occurred in the wake of the massive number of non-performing subprime loans in the U.S. We examine how the SMEs responded to the shocks, using the unique surveys that were conducted by the Research Institute of the Economy, Trade and Industry in 2008 and 2009. The shocks were identified as demand, supply, and financial shocks. The demand shock was the most prevalent of the shocks, while the financial shock was least frequent. The SMEs took a spectrum of measures against the demand shock by seeking help from suppliers and financial institutions. We find that the measures taken by the SMEs crucially depended on the bank–firm relationship as well as the customer–supplier relationship. The bank-dependent SMEs asked their closely-affiliated financial institutions for help, while the SMEs less dependent on financial institutions sought help primarily from their suppliers. A long customer–supplier relationship plays an important role in mitigating the supply shock.

Journal

Small Business EconomicsSpringer Journals

Published: Jun 12, 2012

References

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