JOURNAL OF THE JAPANESE AND INTERNATIONAL ECONOMIES 10, 71–96 (1996) ARTICLE NO. 0004 The Financing of Industry, 1970–1989: An International Comparison* JENNY CORBETT St. Antony’s College, Oxford University, Oxford OX2 6JF, United Kingdom, and Centre for Economic Policy Research AND TIM JENKINSON Keble College, Oxford University OX1 3PG, United Kingdom, and Centre for Economic Policy Research Received November 10, 1994; revised June 2, 1995 Corbett, Jenny, and Jenkinson, Tim—The Financing of Industry, 1970–1989: An International Comparison This paper constructs a comparative set of data on the sources of finance for investment for the UK, United States, Germany, and Japan and challenges some conventional views of international differences. We document the problems of international comparisons and argue that net sources and uses data based on national income accounts provide the most consistent information. We conclude that there is no ‘‘market-based’’ Anglo–U.S. pattern of finance. Most countries are internally financed with small or negative contributions from market sources. Japan has had larger contributions from all external sources. Over the period of financial liberalization, all countries except Japan have become more internally, and less market, financed. J. Japan. Int. Econ. March 1996, 10(1), pp. 71–96. St. Anthony’s College, Oxford University, Oxford OX2 6JF, United Kingdom, and Centre * This paper is part of the Centre for Economic Policy Reseach ‘‘International Study of the Financing of Industry’’ project, core funding for which has been provided by the Anglo- German Foundation, the Bank of England, the Economic and Social Research Council (grant YE052550018), the Esmee Fairbairn Charitable Trust, and the Japan Foundation. An earlier version of the paper appeared as CEPR Discussion Paper No. 948. We are indebted to the other members of the project Ian Alexander, Elisabetta Bertero, Jeremy Edwards and Colin Mayer who not only shaped our views on some of the issues, but were also instrumental in providing some of the original data. The paper also benefited from comments at seminars at the CEPR, the Oxford Institute of Economics and Statistics and the Economic Planning Agency in Tokyo. However, the views expressed, and any remaining errors, remain our responsibility. 71 0889-1583/96 $18.00 Copyright  1996 by Academic Press, Inc. All rights of reproduction in any form reserved.