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Institutional investor cliques and their voice in Japan : A fact finding

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  • FUJITANI, Ryosuke
  • ITO, Akitoshi
  • IWATA, Kiyonori

Abstract

This study examines how sub-communities of institutional investors (‘cliques’) play a governance role through their coordinated engagement via-à-vis Japanese firms. Based on the five-percent ownership threshold for defining a link in the investor network, we identify several cliques among institutional investors investing in Japanese firms. We show that the largest clique of each firm votes on behalf of shareholder’s value at shareholder meetings. We also find that institutional investors in the same clique vote in the same direction more frequently than institutions which do not belong to the same clique. These findings suggest that institutional investors coordinate their voting behaviors to enhance value-increasing managerial decisions.

Suggested Citation

  • FUJITANI, Ryosuke & ITO, Akitoshi & IWATA, Kiyonori, 2024. "Institutional investor cliques and their voice in Japan : A fact finding," Working Paper Series 253, Management Innovation Research Center, School of Business Administration, Hitotsubashi University Business School.
    • Handle: RePEc:hit:hmicwp:253
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