Abstract

http://ssrn.com/abstract=1958169
 
 

References (36)



 


 



Is Japan Really a 'Buy'? The Corporate Governance, Cash Holdings, and Economic Performance of Japanese Companies


Kazuo Kato


Osaka University of Economics

Meng Li


Naveen Jindal School of Management, The University of Texas at Dallas

Douglas J. Skinner


The University of Chicago - Booth School of Business

October 1, 2014

Chicago Booth Research Paper No. 13-06

Abstract:     
We investigate whether Japan’s corporate governance reforms improve economic performance and valuation. Consistent with an improvement in governance since 2000, Japanese firms hold less cash and increase payouts to shareholders. Improvements in performance are associated with reductions in (excess) cash, reductions in the influence of the banks that traditionally sit at the center of horizontal keiretsu, and increases in the holdings of management and foreign investors. The market valuation of Japanese firms’ cash holdings was lower than for US firms during the 1990s but increases to levels closer to those of US firms in the 2000s. Collectively, the evidence suggests that performance improves in those Japanese companies that reform their governance practices. These findings have implications for other Asian economies, such as China, India, and Korea, where there are ongoing discussions of how improved governance can increase firm performance and valuation.

Number of Pages in PDF File: 61

Keywords: Japan, corporate governance, payout policy, dividends

JEL Classification: G15, G34, G35

working papers series





Download This Paper

Date posted: November 12, 2011 ; Last revised: October 25, 2014

Suggested Citation

Kato, Kazuo and Li, Meng and Skinner, Douglas J., Is Japan Really a 'Buy'? The Corporate Governance, Cash Holdings, and Economic Performance of Japanese Companies (October 1, 2014). Chicago Booth Research Paper No. 13-06. Available at SSRN: http://ssrn.com/abstract=1958169 or http://dx.doi.org/10.2139/ssrn.1958169

Contact Information

Kazuo Kato
Osaka University of Economics ( email )
2-2-8 Osumi
Higashiyokogawa-ku
Osaka
Japan
Meng Li
Naveen Jindal School of Management, The University of Texas at Dallas ( email )
800 W Campbell Road
Richardson, TX 75080
United States
(972)883-2492 (Phone)
Douglas J. Skinner (Contact Author)
The University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7137 (Phone)

Chicago Booth School of Business Logo

Feedback to SSRN


Paper statistics
Abstract Views: 1,691
Downloads: 448
Download Rank: 36,438
References:  36

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.391 seconds