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Corporate Finance and Human Resource Management

Author

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  • Masahiro Abe
  • Takeo Hoshi

Abstract

Corporate governance can be defined to be an institution that constrains relations between corporate managers and various stakeholders, including shareholders, creditors, workers, suppliers, and customers. Under this broad definition, corporate governance is a system of various sub-systems that are complementary to one another. This paper focuses on two sub-systems of the Japanese corporate governance: one on corporate finance and another on human resource management. After briefly documenting the characteristics of the Japanese corporate governance in these two sub-systems, the paper discusses how each sub-system has been going through substantial changes in recent years. Examining the data for 58 listed companies, we find preliminary evidence on the complementarity between the two sub-systems. The firms that have non-traditional ownership structure (especially high foreign ownership) seem to have more non-traditional human resource management practices.

Suggested Citation

  • Masahiro Abe & Takeo Hoshi, 2004. "Corporate Finance and Human Resource Management," Discussion papers 04027, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:04027
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    File URL: https://www.rieti.go.jp/jp/publications/dp/04e027.pdf
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    References listed on IDEAS

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    1. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    2. Tirole, Jean, 2001. "Corporate Governance," Econometrica, Econometric Society, vol. 69(1), pages 1-35, January.
    3. Tsuru, Tsuyoshi & Abe, Masahiro & Kubo, Katsuyuki, 2003. "Pay Structures and the Transformation of Japanese Firms―An Empirical Analysis of Performance and Pay Using Personnel Data―," Economic Review, Hitotsubashi University, vol. 54(3), pages 264-285, July.
    4. Hoshi, Takeo, 2002. "Japanese Corporate Governance," Economic Review, Hitotsubashi University, vol. 53(4), pages 289-304, October.
    5. Takeo Hoshi & Anil Kashyap, 2004. "Corporate Financing and Governance in Japan: The Road to the Future," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582481, April.
    6. Kenji Kojima, 1994. "Corporate Governance An International Comparison. 1," Discussion Paper Series 34, Research Institute for Economics & Business Administration, Kobe University.
    7. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
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    Cited by:

    1. Masahiko Aoki, 2006. "Whither Japan's Corporate Governance?," Discussion Papers 05-014, Stanford Institute for Economic Policy Research.
    2. KATO Takao & KODAMA Naomi, 2019. "The Consequences of Short-Time Compensation: Evidence from Japan," Discussion papers 19056, Research Institute of Economy, Trade and Industry (RIETI).
    3. Takeo Hoshi & Anil K Kashyap, 2020. "The Great Disconnect: The Decoupling of Wage and Price Inflation in Japan," NBER Working Papers 27332, National Bureau of Economic Research, Inc.
    4. W. R. Garside, 2012. "Japan’s Great Stagnation," Books, Edward Elgar Publishing, number 14624.

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