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The Reform of (Corporate) Governance in Japan

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  • Martin Schulz

Abstract

There is wide agreement that governance in Japan during the period of “high growth” was based on a system of contributions from different stakeholder groupings, closely interlinked as “insiders” of the corporate finance and production process. In the meantime, however, the system has outlived its usefulness by becoming too complex for a mature economy. As a result, governance is moving to a system of “outsider” or shareholder participation and control. This transformation remains costly and time consuming because the closely linked system of stakeholder interests requires a stepwise introduction of profit-oriented governance in accord with acceptance of different stakeholder groups (the government, bureaucracy, management, suppliers, workers, etc.) This article concentrates on the question of why it has been (and is) so difficult to implement this turnaround, and if the current reform plans are up to the task.

Suggested Citation

  • Martin Schulz, 2001. "The Reform of (Corporate) Governance in Japan," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(4), pages 527-545.
    • Handle: RePEc:diw:diwvjh:70-40-7
    DOI: 10.3790/vjh.70.4.527
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    References listed on IDEAS

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    1. Chew, Donald, 1997. "Studies in International Corporate Finance and Governance Systems: A Comparison of the US, Japan, and Europe," OUP Catalogue, Oxford University Press, number 9780195107951.
    2. Michael C. Jensen, 1991. "Corporate Control And The Politics Of Finance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 4(2), pages 13-34, June.
    3. Merton H. Miller, 1994. "Is American Corporate Governance Fatally Flawed?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(4), pages 32-39, January.
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