Government and Business Nexus: Evidence from Japan

32 Pages Posted: 11 Sep 2008 Last revised: 31 Jan 2013

See all articles by Manoj Raj

Manoj Raj

affiliation not provided to SSRN

Takeshi Yamada

Australian National University (ANU)

Date Written: November 12, 2008


This paper investigates the incentive structure that encourages the appointment of retired bureaucrats in the boardrooms of the Japanese private corporations. For the sample of 4590 firm-years from 25 industries we find that such appointments are more likely to occur (i) if private corporations have business with the government. (ii) We find such incentive is more emphasized for larger sized corporations. (iii) However, for firms with smaller market shares facing more competition, we find that incentives to hire retired bureaucrats increase. (iv) We also find firms that belong to corporate groups (keiretsu) are less likely to hire retired bureaucrats. The evidence suggests existence of tacit collusion between the government and the private corporation as also lent support to 'equalizing process' theory.

Keywords: political connection, corporate governance

JEL Classification: G38, G30, K2

Suggested Citation

Raj, Manoj and Yamada, Takeshi, Government and Business Nexus: Evidence from Japan (November 12, 2008). 21st Australasian Finance and Banking Conference 2008 Paper. Available at SSRN: or

Manoj Raj

affiliation not provided to SSRN ( email )

Takeshi Yamada (Contact Author)

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics