Changes in Corporate Governance and Top Executive Turnover: The Evidence from Japan

51 Pages Posted: 18 Sep 2017

See all articles by Hideaki Miyajima

Hideaki Miyajima

Waseda University - Graduate School of Commerce; Research Institute of Economy, Trade and Industry (RIETI)

Ryo Ogawa

Osaka University - Institute of Social and Economic Research

Takuji Saito

Waseda University

Date Written: September 2017

Abstract

We examine the turnover of top executives in Japanese firms throughout the period from 1990 to 2013. During this time, the presence of a main bank has been weakened, the ownership of institutional investors has dramatically increased, and independent outside directors have been introduced in many firms. We find that top executive turnover sensitivity to corporate performance has not changed, although return on equity (ROE) and stock returns displace return on assets (ROA) as performance indicators that turnover is most sensitive to. The evidence also indicates that instead of the main bank, foreign institutional investors have begun to play an important governance role in Japan. However, the main bank does not abandon its governance role. While the scope of the main bank’s authority may have substantially contracted, main banks continue to perform a certain role in disciplining management.

Suggested Citation

Miyajima, Hideaki and Ogawa, Ryo and Saito, Takuji, Changes in Corporate Governance and Top Executive Turnover: The Evidence from Japan (September 2017). NBER Working Paper No. w23812. Available at SSRN: https://ssrn.com/abstract=3038622

Hideaki Miyajima (Contact Author)

Waseda University - Graduate School of Commerce ( email )

1-6-1, Nishi-Waseda
Shinjuku-ku, Tokyo 169-8050
Japan
(81 3) 5286 2019 (Phone)
(81 3) 3203 7067 (Fax)

Research Institute of Economy, Trade and Industry (RIETI) ( email )

1-3-1 Kasumigaseki
Chiyoda-ku
Tokyo 100-8901
Japan

Ryo Ogawa

Osaka University - Institute of Social and Economic Research ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Takuji Saito

Waseda University ( email )

Okhubo Campus, Shinjuku-ku, Room 59-416B
Tokyo, Tokyo 169-8555
Togo

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