Corporate Governance and Transparency in Japan
67 Pages Posted: 1 Jul 2011 Last revised: 13 Nov 2018
Date Written: November 13, 2018
We examine whether better-governed, listed Japanese firms are more transparent to their shareholders. We use governance ratings compiled by the Nikkei Corporate Governance Evaluation System to measure corporate governance. For a sample of Tokyo Stock Exchange First Section firms between 2003 and 2013, we examine whether corporate governance quality is associated with firm’s transparency. Compared with firms with weaker governance, we find that better-governed firms make more frequent public disclosures, their disclosures of good news are timelier, and their share prices reflect good news faster. However, we did not detect comparable effects for bad news, which has implications for regulators.
Keywords: Corporate Governance; Transparency; Disclosures; Price Discovery; Timeliness.
JEL Classification: C26, G34, G39
Suggested Citation: Suggested Citation