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The role of corporate governance in Japanese unlisted companies

Author

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  • Fukuda, Shin-ichi
  • Kasuya, Munehisa
  • Nakajima, Jouchi

Abstract

The purpose of this paper is to examine the effects of corporate governance on the performance of Japanese unlisted companies from 1997 to 2002, when the problem of non-performing loans became serious. Using data of unlisted companies, we examine to what extent the ownership structure has a significant impact on firm’s performance. When estimating the determinants of Tobin’s q, we find that the ownership structure has a significant influence on the performance of each unlisted company. However, the impact was totally different between companies with good performance and bad performance. In particular, the increase in the shareholding ratio of a specific individual or a parent company worked positively for companies with good performance, but it worked negatively for companies with poor performance. The results suggest that the distorted governance structure in unlisted companies, which had worked well during the bubble economy, may have significantly restricted their recovery under prolonged recession in Japan.

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  • Fukuda, Shin-ichi & Kasuya, Munehisa & Nakajima, Jouchi, 2018. "The role of corporate governance in Japanese unlisted companies," Japan and the World Economy, Elsevier, vol. 47(C), pages 27-39.
    • Handle: RePEc:eee:japwor:v:47:y:2018:i:c:p:27-39
    DOI: 10.1016/j.japwor.2018.03.006
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    4. HANNAH, Leslie, 2018. "Corporate Governance, Accounting Transparency and Stock Exchange Sizes in Germany, Japan and “Anglo-Saxon” Economies, 1870-1950," Discussion paper series HIAS-E-77, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    5. Blind, Georg D. & Lottanti von Mandach, Stefania, 2021. "Private Equity Buyouts in Japan: Effects on Employment Numbers," Journal of the Japanese and International Economies, Elsevier, vol. 59(C).
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    More about this item

    Keywords

    Corporate governance; Unlisted companies; Tobin’s q;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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