Investigating Japanese Banking Sector Competition - A panel data Dissertation

Investigating Japanese Banking Sector Competition - A grace data approach - Dissertation ExampleIntroduction Albeit the Japanese stinting system has been long hailed as the posture of success in Asia, the transition towards a securities industry oriented economy has not been smooth. Despite of the ravages remaining in the aftermath of the 2nd world war, the 1960s and 1970s saw Japan attain hugely high rates of frugal gain (Johnson, 1982). The regulated monetary sector working in in tandem with the government and business corporations led to a stable and steady integrated economic system which allowed the economy to flourish. The Japanese banking system had a critical role to play in this phase. Not only did the banks roleplay as corporate governing bodies, they also played roles or rescuers when enterprises where in financial difficulties. By providing loans to enterprises that were put in sectors with strong growth potential these banks shared the risks in similar vein t o venture capitalists (Wade, 1999). plainly in the decenniums of the 1970s and 1980s the fast growing economy compelled by the global environment of market integration had to modify its structure and attempt to adjust to the new environment. Growing domestic businesses gradually had a lower requirement to borrow from the domestic banking system. Circumvention of financing from external sources coupled with developing asset markets through with(predicate) the accumulation over the earlier decades led to alterations in the capital flows and liberalization of the financial sector followed (Noguchi, 1998). In the latter half of the 1980s decade such liberalization resulted in a lack of satisfactory tightness in monetary conditions which in turn led to an asset oriented initial upturn and economic boom but finally the asset bubble got burst and this opened the floodgates for Japans economic woes. Due to the depressed market conditions the 1990s have been famously coined as the lost de cade (Takahashi, 2011). Since the azoic 2000s the Japanese economy has been in the process of trying to recover through market oriented reforms but no remedy to the ailment which continued to make the economy weaker and the recent global financial crisis has only worsened the situation (see ikons 1 to 3). Figure 1 Figure 1 above shows the pathway of real GDP over time. Evidently the climb is steeper and more steady until 1990 since when evidence of unpredictability is observed and the slope is flatter as well. A substantial dip is also visible in the mid 2000s. Figure 2 Figure 2 reveals that the percentage of annual GDP growth has in reality been quite volatile. However, more noticeably there is a downward trend in the series and the growth rate has decelerated to negative values over the last few years. Figure 3 Finally figure 3 shows the average growth rate for the four decades since 1970. Evidently the performance was substantially lower in the decade of the 1990s and to add to the woes of the economy, the growth rate has been even lower in the 1st decade of the 2000s. The economy is still in quest for attaining a system that has the advantage of institutional complementarities as it erst had in its golden era of growth. Substantial amounts of research has established that the degree of competitiveness has important intention on economic growth and