Is Japan Really a 'Buy'? The Corporate Governance, Cash Holdings, and Economic Performance of Japanese Companies
Osaka University of Economics
Naveen Jindal School of Management, The University of Texas at Dallas
Douglas J. Skinner
The University of Chicago - Booth School of Business
February 1, 2013
Chicago Booth Research Paper No. 13-06
We test whether reforms in Japanese corporate governance have been effective. Specifically, we investigate whether Japanese firms improve their management of cash and whether such changes translate into improved performance. Consistent with improved governance for some Japanese firms since the late 1990s, we find that, on average, the (excess) cash holdings of Japanese firms decline; that cash holdings are now more sensitive to their hypothesized economic determinants; and that there is a strong overall increase in dividends and repurchases. These changes relate to improvements in performance and changes in ownership characteristics in ways consistent with an overall improvement in governance.
Number of Pages in PDF File: 57
Keywords: Japan, corporate governance, payout policy, dividends
JEL Classification: G15, G34, G35working papers series
Date posted: November 12, 2011 ; Last revised: February 18, 2013
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