liquidity risk. We find that, during Japan''s deflationary period, firms with more liquid balance sheets were less exposed to … price. We document a steep drop in the liquidity of the Japanese stock market in the post-bubble period and a steep rise in … stock market liquidity risk, while slowly growing firms were highly exposed to liquidity shocks. Also, aggregate liquidity …

Sizable risk capital from outside may be necessary to accelerate Japan''s corporate restructuring to replace the stock …