Dr Kentaro Asai

Ph.D., M.A., and B.A. with Honors in Economics (The University of Chicago)
Lecturer (Assistant Professor)
ANU College of Business and Economics

Areas of expertise

  • Applied Economics 1402
  • Banking, Finance And Investment 1502

Research interests

Kentaro's main research interests lie in the area of corporate finance, political economy, banking, and behavioral finance. During the Ph.D. program, he developed the model of a firm’s investment and financial decisions under limited commitment. Utilizing the model, he examined the impact of bank regulation. In addition, he proposed the quantitative framework for assessing the effects of state variables on corporate risks through fundamental and equilibrium-selection channels. He applied the framework to estimate the impact of lobbying on a bank’s credit risk in his job market paper.

Kentaro has worked on various projects with many researchers. He worked with John List and Ali Hortaçsu to examine why the endowment effect—the finding that people ascribe more value to things that they own—is mitigated by trading experiences through experimental data. Moreover, he published a paper and report about financial regulation as a member of Global Stability Division in the IMF. Lastly, he is investigating the effects of “revolving doors”—the movement of professionals between bureaucracies and businesses—on the outcomes of procurement auctions with Kei Kawai and Jun Nakabayashi, using a large dataset of Japanese public procurement auctions. 

Researcher's projects

Selected research papers in progress

Bank Lobbying as a Financial Safety Net: Evidence from the Post-Crisis U.S. Banking Sector

The classical view is that bank lobbying is associated with increased bank risk taking. In theory, however, it can serve as a credible commitment device that mitigates creditors' concerns for bank failures in the presence of a self-fulfilling prophecy, given that lobbying banks received ample financial support from the government during the recent financial crisis. This paper overcomes the empirical challenge to estimate the channel mediated by creditors' beliefs using structural approach, and quantifies the role of bank lobbying as a financial safety net in the post-crisis U.S. banking sector.

Regulatory Capture in Public Procurement: Evidence from Revolving Door Bureaucrats in Japan (with Kei Kawai and Jun Nakabayashi)

We study how hiring public officials affects firms' ability to win government contracts. By linking personnel transitions of public officials and government construction projects awarded to firms in Japan, we find evidence consistent with the exchange of post-retirement employment for an increase in government contracts. We find that firms that hire a public official experience an increase of about 6.6--10.8 percent (0.7--1.2 percentage points) in the probability of winning a contract. Our results also suggest that quid-pro-quo arrangements are not made as simple bilateral agreements between an individual public official and a firm, but rather maintained through repeated interactions between a firm and generations of public officials, consistent with the model of Salant (1995).

Return to top

Updated:  17 February 2019 / Responsible Officer:  Director (Research Services Division) / Page Contact:  Researchers