Banks, Ownership Structure, and Firm Value in Japan
Journal of Business, Vol. 73, No. 4, 2000
University of Alberta School of Business Research Paper No. 2013-618
Posted: 7 Jun 2013
There are 3 versions of this paper
Banks, Ownership Structure, and Firm Value in Japan
Date Written: October 6, 1999
Abstract
We investigate the relation between firms' ownership structures and q ratios in Japan. At low levels of ownership by main banks, firms' q ratios fall as bank equity ownership rises. At higher levels of bank 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 United States, firm value rises monotonically with increased managerial ownership. Equity ownership by corporate blockholders is also positively related to firm value in Japan.
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