IDEAS home Printed from https://ideas.repec.org/h/eme/afeczz/s1569-3732(04)11001-3.html
   My bibliography  Save this book chapter

Foreign Ownership And Firm Value: Evidence From Japan

In: Corporate Governance

Author

Listed:
  • Stephen P. Ferris
  • Kwangwoo Park

Abstract

We find a significant curvilinear relation between Japanese firm value and the percentage of equity held by foreign investors. Firm value rises until foreign ownership reaches approximately 40%, and then it begins to decline. It appears that large foreign institutional investors invest in well-performing firms and serve as effective monitors. Our results remain robust even after controlling for other corporate governance variables, such as equity ownership by main banks and board membership by foreign investors. It seems that most of the increase in firm value and the performance improvement are due to rising levels of equity ownership in non-keiretsu (independent) firms by foreign investors. We also show that an increase in foreign ownership is correlated with a rise in R&D expenditures, suggesting that foreign institutional investors contribute to the long-term viability and competitiveness of Japanese firms.

Suggested Citation

  • Stephen P. Ferris & Kwangwoo Park, 2005. "Foreign Ownership And Firm Value: Evidence From Japan," Advances in Financial Economics, in: Corporate Governance, pages 1-29, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:afeczz:s1569-3732(04)11001-3
    DOI: 10.1016/S1569-3732(04)11001-3
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1016/S1569-3732(04)11001-3/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1016/S1569-3732(04)11001-3/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1016/S1569-3732(04)11001-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kentaro Azuma & Nicolas M. Dahan & Jonathan Doh, 2024. "Shareholder reaction to corporate philanthropy after a natural disaster: an empirical exploration of the “signaling financial prospects” explanation," Asia Pacific Journal of Management, Springer, vol. 41(3), pages 1421-1449, September.
    2. Enomoto, Masahiro & Jung, Boochun & Rhee, S. Ghon & Shuto, Akinobu, 2024. "The impact of accounting quality on investment efficiency: Evidence from the 2001 bank shareholding limitation act of Japan," Japan and the World Economy, Elsevier, vol. 72(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:afeczz:s1569-3732(04)11001-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.