Banks, Ownership Structure, and Firm Value in Japan

Morck, Randall; Shivdasani, Anil; Nakamura, Masao

doi:10.2139/ssrn.219912

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Banks, Ownership Structure, and Firm Value in Japan

Sauder School of Business Working Paper

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 Governance Institute (ECGI); 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

There are 3 versions of this paper

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: 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