Crowding-Out Effects of a Government-Owned Depository Institution: Evidence from a Natural Experiment in Japan

Beginning in 2000, Japan’s government-owned postal saving system experienced a rapid outflow of funds as a large number of 10-year fixed-rate Postal Saving Certificates (PSCs) that had been purchased during the period of high interest rates in the early 1990s were maturing. This paper exploits this episode as a natural experiment to investigate the crowding-out effects of a government-owned depository institution on local economies. The panel data of 47 prefectures from 1995 to 2004 show that the prefectures where local funds were heavily invested in the postal saving system in the early 1990s tended to experience a larger shift of funds into private banks from the postal saving system in the early 2000s, suggesting that the exogenous maturing of PSCs was in part responsible for the observed shifts in the allocation of local funds. More importantly, the (instrumented) flow of local funds to private banks from the postal saving system has statistically robust and economically important positive effects on local output and on the number of small firms, but not on the number of large firms. These results provide empirical support for the view that a government-owned depository institution has crowding-out effects on local economies and, in particular, on small firms that rely on local banks in direct competition with government-owned depository institutions for local deposits.Postal Saving system, Japan, Crowding-Out

Bank Integration and Local Credit Cycle:Evidence from Japan

This paper investigates how the integration of local banking markets affects the credit and economic cycle of local economies by using both a data set on the branch network of nationwide city banks and a prefecture-level panel data set on the formation and collapse of the real estate bubble in Japan. The empirical results show that the presence of city banks does not seem to have lessened the effects of local financial shocks on local economies. On the contrary, we find evidence that nation-wide city banks aggressively transmitted financial shocks that originated from major cities to local peripheral economies. These results suggest a dark side of large nation-wide banks: they can be a source of financial and economic volatility when they elect to take concentrated risk and spread out the impacts of large financial shocks to peripheral economies.

Does Taxation on Banks Tax Bank Borrowers? Evidence from the Tokyo Bank Tax Experiment

We investigate the economic impacts of bank taxation on the value of banks and that of borrowing firms, exploiting the surprise announcement of a tax by the Tokyo metropolitan government as a natural experiment. We find that the tax announcement had broad effects on the share prices of banks, although the effects are stronger for a subset of soon-to-be taxed banks. However, the adverse effects of the tax on bank borrowers, although statistically significant, turn out to be quantitatively small (a half of the effects on bank share prices). These results suggest that the adverse economic consequence of bank taxation is felt primarily on banks themselves.

An optimal finite-dimensional modeling in heat conduction and diffusion equations with partially known eigenstructure

An optimal finite-dimensional modeling technique is presented for a standard class of distributed parameter systems for heat and diffusion equations. A finite-dimensional nominal model with minimum error bounds in frequency domain is established for spectral systems with partially known eigenvalues and eigenfunctions. The result is derived from a completely characterized geometric figure upon complex plane, of all the frequency responses of the systems that have (i) a finite number of given time constants T/sub i/'s and modal coefficients k/sub i/'s, (ii) an upper bound /spl rho/ to the infinite sum of the absolute values of all the modal coefficients k/sub i/'s, (iii) an upper bound T to the unknown T/sub i/'s, and (iv) a given dc gain G(0). Discussions are made on how each parameter mentioned above makes contribution to bounding error or uncertainty, and we stress that steady state analysis for dc input is used effectively in reduced order modeling and bounding errors. The feasibility of the presented scheme is demonstrated by a simple example of heat conduction in ideal copper rod. </p

Soft Related Lending: A Tale of Two Korean Banks

In this paper, we present indirect evidence that the IMF’s insistence on foreign control of two large nationwide Korean banks in exchange for short-term support during the 1997 financial crisis helped restrain soft related lending practices. News signaling the likely sale of a bank to a foreign financial institution yields an average daily decrease of about 2% in the stock price of related borrowers. News indicating difficulty in finding an interested foreign investor generates an increase in the stock price of related borrowers of about the same magnitude. These signals have larger impacts on less-profitable, less-liquid, and more bank-dependent firms.Related Lending, Korean Banks, Privatization, Globalization

Route Tracking Control of Tractor-Trailer Vehicles based on Fuzzy Controller

Recently, Factory Automation is actively been carried out in industry. Usually, a single AGV is used to transport products for factory automation. While, a Tractor-Trailer Vehicle can load much more products compared with a single AGV. Addition to this, transportation time can be shortened by separating containers. But, it is not so easy to drive the trailer according to the orbit during running of the Tractor-Trailer Vehicle. In this study, fuzzy control scheme is studied to support satisfactory route tracing of a tractor-trailer vehicle. To extruct the control rules, a fuzzy control system is developed

Optimal Digital Control Systems Design for Handling Machines using dsPIC

This paper presents a method of the controller design for the handling machine by using dsPIC(Digital Signal Processor + Peripheral Interface Controller). Recently, many manufacturing robots are operated in manufacturing facilities, with the aim of labor, cost saving, and improvement of the productivity. Such robots need to have positioning performance of high precision and simultaneously to save cost. In this paper, a digital optimal servo controller is designed, and it is implemented into our barebones controller which involves dsPIC. We have designed and manufactured the controller which is added suitable peripherals to improve the consistency between the mechanical machine operating in continuous time and controller in discrete time. The significance of this research is that digital implementation of the embedded system which has performance-limitation has ensured a comparable result, against the one with PC which has broad utility. When it is used as a controller, it is possible to restrain product prices greatly equivalent PC precision. We demonstrate potential that good control can be achieved even with low cost. Our research has lead to the viability of lower cost and higher performance system for the production process at factories

Surface Defect Inspection of a Cutting Tool by Image Processing with Neural Networks

In this research, an image processing method and a system for inspection support of a rod figured cutting tool are developed. As is well known, the visual inspection of a cutting tool by image processing is not easy, because cutting blade have a helical blade structure. To cope with the problem, an experimental facility with rotation and longitudinal tool shift functions to enable acquisition of blade surface pictures along a cutting rod is developed. The type of the defect treated in this paper is the spot of coating on blade surface. To judge the quality of the processed image of blade surface, neural network with autonomous learning is used. The processed image of cutting tool is divided into 64 × 64 blocks used for the input to the neural networks. Before input, each block data is preprocessed applying a edge detection filter and a transformation by the discrete fourier transform (DFT). Using these technologies, the experimental inspection system is built and tested to check the capabilities of the inspection algorithms. The diagnostic performance of the surface defect of a cutting tool was confirmed. There remained a problem to mis judge the normal tools as the defect