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The basic differences between the financing patterns of U.S. and Japanese firms are in the source of

financing--internal versus external-- and the composition of external finance--bank borrowing versus debt securities.

Historically, U.S. companies have received 60% to 70% of their funds from internal sources. By contrast, Japanese

companies have relied heavily on external funds to finance their strategy of making huge industrial investments and

pursuing market share at the expense of profit margins. Industry's sources of external finance also differ widely between

Japan and the United States. Japanese firms rely heavily on bank borrowing, while U.S. firms raise much more money

directly from financial markets by the sale of securities.

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Q: What are Difference between the financing patterns of US and Japanese firms?
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