Doctoral Dissertation Research: Embeddedness, Relationships, and Geographies of Global Banking: Japanese City Banks in Global Syndicated Credit Markets

University Of Minnesota-Twin Cities, Minneapolis MN

Investigators

Abstract

Deregulation and globalization of financial markets and the introduction of new information technologies in the financial industry have had profound impacts on the banking industry. This doctoral dissertation research project will examine the extent to which these challenges are affecting the globalization of Japanese banks in syndicated credit markets. Specifically, the project will investigate whether Japanese banking is becoming more similar to European and U.S. banking in the face of similar global pressures or whether Japanese banks remain distinctive because of the Japanese political and economic context in which they are embedded as well as the competitive pressures from the existing banking structure, especially networks among non-Japanese global banks. The research will examine the globalization of Japanese banks as the outcome of changes in the Japanese financial markets, the existing structures of the global financial markets, and the networks strategies of Japanese banks embedded in the other two forces. Using the DealScan database, the student will compare the behaviors of six Japanese city banks and those of eight banks from U.S. and Europe with respect to the overall lending practices and performance and the geography of financial intermediation (the international networks of investors and borrowers in which they participate). The student will examine the domestic and the global context in which Japanese banks have evolved since the mid-1980s. Second, using the league tables in DealScan, the student will identify the major players and the country shares in the global syndicated credit markets. The student then will create Arranger-Participant matrices and Arranger-Borrower matrices of individual banks and statistically measure the extent to which the international networking behavior of Japanese banks differs from those of non-Japanese global banks. Geographers have not explored the possibility of quantitative and empirical research on the behavior of global financial institutions due to lack of geo-referenced data sources. Through the use of the DealScan database, this project will demonstrate elements of the geography of international portfolio lending by banks of different nationalities, an aspect of international investment that rarely is documented. The study will also illustrate the importance of geography in understanding financial networks by showing how the different status of financial institutions in various markets has been considered in network creation. As a Doctoral Dissertation Research Improvement award, this award also will provide support to enable a promising student to establish a strong independent research career.