Banks and Corporate Control in Japan

Journal of Finance. 54(1) 319-339, Feb. 1999

University of Alberta School of Business Research Paper No. 2013-621

Posted: 7 Jun 2013

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

Masao Nakamura

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

Date Written: Feb 6, 1998

Abstract

Using a large sample of Japanese firm level data, we find that Japanese banks act primarily in the short term interests of creditors when dealing with firms outside bank groups. Corporate control mechanisms other than bank oversight appear necessary in these firms. When dealing with firms in bank groups, banks may act in the broader interests of a range of stakeholders, including shareholders. However, our findings are also consistent with banks “propping up” troubled bank group firms. We conclude that bank oversight need not lead to value maximizing corporate governance.

Suggested Citation

Morck, Randall K. and Nakamura, Masao, Banks and Corporate Control in Japan (Feb 6, 1998). Journal of Finance. 54(1) 319-339, Feb. 1999; University of Alberta School of Business Research Paper No. 2013-621. Available at SSRN: https://ssrn.com/abstract=2275575

Randall K. Morck (Contact Author)

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

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)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
514
PlumX Metrics