Our finding on the role of bank-bas

Our finding on the role of bank-based financial systems in the asset growth effect is consistent with, and
complements, several studies on bank-based economies in this region. For example, Ferris et al. (1995)
show that the reliance on bank financing for Japanese keiretsu firms mitigates the agency conflicts and
creates more efficient information channel between these members. Kang and Shivdasani (1999) find that
bank-affiliated firms tend to have lower equity ownership by management and larger boards. In a recent
study, Baik et al. (2010) find that in a bank-based economies such as Japan, the positive impact of
accounting quality on firm investment efficiency is least pronounced.