Abstract
This paper provides a brief explanation of the Japanese public credit guarantee system and analyzes what role it played during the global financial crisis. The author conducted a questionnaire survey of small and medium-sized enterprises (SMEs) in Aichi Prefecture, the prefecture most seriously hit by the crisis, in collaboration with the Aichi-ken Credit Guarantee Corporation. Using the survey, which provides valuable information about the usage of the credit guarantee program, this paper finds that the credit guarantee system was effective in protecting the economy from collapsing. The system was so generous that now almost all SMEs want it to remain unchanged. However, as the generous system brings heavy financial burdens on the Japanese government and, more seriously, discourages firms and banks from improving their efficiencies, the author insists that reforms, such as limiting the target and the guarantee coverage, are inevitable.
Highlights
After the collapse of the US’s Lehman Brothers in the fall of 2008, the global financial crisis began in the US and European countries
This paper provides a brief explanation of the Japanese public credit guarantee system and analyzes what role it played during the global financial crisis based on a questionnaire survey of Japanese small and medium-sized enterprises (SMEs) that the author conducted
This paper finds that the credit guarantee system was effective in protecting the economy from collapsing under the global financial crisis
Summary
After the collapse of the US’s Lehman Brothers in the fall of 2008, the global financial crisis began in the US and European countries. This paper provides a brief explanation of the Japanese public credit guarantee system and analyzes what role it played during the global financial crisis based on a questionnaire survey of Japanese small and medium-sized enterprises (SMEs) that the author conducted. At a time when the Japanese economy was facing an economic crisis as a result of this unprecedented crisis, the author conducted a questionnaire survey of SMEs in Aichi Prefecture, which was the area most seriously hit by the crisis, in collaboration with the Aichi Credit Guarantee. For this purpose, I use the questionnaire survey just mentioned, because the Aichi economy is regarded as a typical example of the Japanese economy.
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