How Is Investment Financed? A Study of Germany, Japan, the United Kingdom and the United States.

The aims of this paper are, first, to construct a consistent comparative set of data on the sources of finance for investment over the period 1970-94 for the United Kingdom, United States, Germany, and Japan, and, second, to challenge conventional views of the international differences in financing patterns. The authors find that there is little evidence to support the view that Germany is a 'bank financed' system nor that the United Kingdom or United States are 'market financed.' While bank finance is more important in Japan, there has been a steady decline in the proportion of investment financed by banks over the last twenty-five years. Copyright 1997 by Blackwell Publishers Ltd and The Victoria University of Manchester