Banks, Ownership Structure, and Firm Value in Japan

57 Pages Posted: 12 Apr 2000

See all articles by Randall Morck

Randall Morck

University of Alberta - Department of Finance and Statistical Analysis; National Bureau of Economic Research (NBER); European Corporate Governence Institute; Asian Bureau of Finance and Economic Research

Anil Shivdasani

University of North Carolina Kenan-Flagler Business School

Masao Nakamura

University of British Columbia (UBC) - Sauder School of Business

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Abstract

We study the relation between firms? banking relations, ownership structures, and q ratios in Japan. At low levels of equity ownership by main banks, firms? q ratios fall as bank equity ownership rises. At higher levels of bank equity ownership, this relationship is mitigated and, in some specifications, even reversed. We argue that this relation reflects both costs and benefits of equity holdings by banks. In Japan, unlike the US, firm value rises monotonically with increased managerial ownership. Equity ownership by corporate blockholders is also positively related to firm value in Japan.

JEL Classification: G21, G32

Suggested Citation

Morck, Randall K. and Shivdasani, Anil and Nakamura, Masao, Banks, Ownership Structure, and Firm Value in Japan. Sauder School of Business Working Paper. Available at SSRN: https://ssrn.com/abstract=219912 or http://dx.doi.org/10.2139/ssrn.219912

Randall K. Morck

University of Alberta - Department of Finance and Statistical Analysis ( email )

2-32C Business Building
Edmonton, Alberta T6G 2R6
Canada
780-492-5683 (Phone)
780-492-3325 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governence Institute ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Asian Bureau of Finance and Economic Research ( email )

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Anil Shivdasani (Contact Author)

University of North Carolina Kenan-Flagler Business School ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
919-962-3182 (Phone)
919-962-2068 (Fax)

Masao Nakamura

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
604-822-8434 (Phone)
604-822-8477 (Fax)

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