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Not a Coincidence: Sons-in-Law as Successors in Successful Japanese Family Firms

Author

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  • Blind, Georg
  • Lottanti von Mandach, Stefania

Abstract

Vikas Mehrotra, Randall Morck, Jungwook Shim and Yupana Wiwattanakantang (2013; hereafter MMSW) observe that listed family firms on average outperform non-family firms in Japan between 1962- 2000. They suggest that this finding can be explained by the practice of adult adoptions and, to a lesser degree, by arranged marriages. Their argument centers on a positive performance differential between non-blood and blood heirs. We cannot exactly replicate MMSW's research, because the authors do not share their data. However, we identify methodological concerns with the evidencing of this differential and show how conceptual considerations reduce their argument to that of arranged marriages. Regardless of any differential we propose another interpretation for the superior performance of businesses run by non-blood heirs and identify indicative evidence for this.

Suggested Citation

  • Blind, Georg & Lottanti von Mandach, Stefania, 2015. "Not a Coincidence: Sons-in-Law as Successors in Successful Japanese Family Firms," MPRA Paper 66695, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:66695
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    References listed on IDEAS

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    1. G. Blind & A. Pyka, 2014. "The rule approach in evolutionary economics: A methodological template for empirical research," Journal of Evolutionary Economics, Springer, vol. 24(5), pages 1085-1105, November.
    2. Gregory Jackson & Andreas Moerke, 2005. "Continuity and Change in Corporate Governance: comparing Germany and Japan," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 351-361, May.
    3. Kaplan, Steven N, 1994. "Top Executive Rewards and Firm Performance: A Comparison of Japan and the United States," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 510-546, June.
    4. Blind, Georg, 2011. "Investigating entrepreneurial spirit with the rule approach: why self-employment is on the decline in Japan," MPRA Paper 66749, University Library of Munich, Germany.
    5. Saito, Takuji, 2008. "Family firms and firm performance: Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 22(4), pages 620-646, December.
    6. Minoru Nakazato & J. Mark Ramseyer & Eric B. Rasmusen, 2009. "Public and Private Firm Compensation Compared: Evience From Japanese Tax Returns," Korean Economic Review, Korean Economic Association, vol. 25, pages 5-33.
    7. Kato, Takao & Kubo, Katsuyuki, 2006. "CEO compensation and firm performance in Japan: Evidence from new panel data on individual CEO pay," Journal of the Japanese and International Economies, Elsevier, vol. 20(1), pages 1-19, March.
    8. Girardin, Eric & Moussa, Zakaria, 2011. "Quantitative easing works: Lessons from the unique experience in Japan 2001â2006," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 21(4), pages 461-495, October.
    9. Mehrotra, Vikas & Morck, Randall & Shim, Jungwook & Wiwattanakantang, Yupana, 2013. "Adoptive expectations: Rising sons in Japanese family firms," Journal of Financial Economics, Elsevier, vol. 108(3), pages 840-854.
    10. Danny Miller & Jamal Shamsie, 2001. "Learning across the life cycle: Experimentation and performance among the hollywood studio heads," Strategic Management Journal, Wiley Blackwell, vol. 22(8), pages 725-745, August.
    11. Charles W. L. Hill, 1995. "National Institutional Structures, Transaction Cost Economizing and Competitive Advantage: The Case of Japan," Organization Science, INFORMS, vol. 6(1), pages 119-131, February.
    12. Vikas Mehrotra & Randall Morck & Jungwook Shim & Yupana Wiwattanakantang, 2010. "Must Love Kill the Family Firm?," NBER Working Papers 16340, National Bureau of Economic Research, Inc.
    13. Amon Chizema & Yoshikatsu Shinozawa, 2012. "The ‘Company with Committees’: Change or Continuity in Japanese Corporate Governance?," Journal of Management Studies, Wiley Blackwell, vol. 49(1), pages 77-101, January.
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    Cited by:

    1. Georg D. Blind & Stefania Lottanti von Mandach, 2021. "Of pride and prejudice: agent learning under sticky and persistent stereotype," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(2), pages 381-410, April.

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    More about this item

    Keywords

    Japan; family firms; outperformance; adoptions; arranged marriages;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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