抄録
The main objective of the paper is to examine how lending to small firms in a local region by regional financial institutions has been influencing its regional economy. Small firms in a Japanese local economy have been depending heavily on bank financing rather than capital markets. This paper investigates into the relationships between of the regional economic strength and loan assets of financial institutions in Miyako and Yaeyama. We have tested the null and alternative hypotheses that there is a positive correlation between loan assets of financial institutions and economic strength in these island regions based on date obtained mainly from the Okinawa Development Finance Corporation. As the result of parameter estimations based on a simple regression analysis, the null hypothesis was rejected at the 5-10% levels of significance. Thus we conclude that there is a positive impact of loan activities on the island economies. Of course there are many points to be improved for further study on this subject including quality and scope of date, methodology and historical and cultural aspects of these islands.
