Under Pressure: Listing Status and Disinvestment in Japan

Posted: 15 Aug 2019 Last revised: 8 Dec 2019

See all articles by Joseph J. French

Joseph J. French

University of Northern Colorado

Ryosuke Fujitani

Tokyo Keizai University

Yukihiro Yasuda

Hitotsubashi University

Date Written: April 5, 2019

Abstract

We provide the first large sample comparisons of disinvestment by listed and unlisted firms. This study focuses on Japanese firms from 2001-2017, as this was a period of economic stagnation and financial reforms encouraging companies to restructure. We show that stock market listing is positively related to disinvestment. Listed firms disinvest 1.9% more than similar unlisted firms. Disinvestment activities of listed companies are also more sensitive to investment opportunities. Additionally, firms that disinvest show improvements in ROA and increases in future investment. Finally, we find that foreign (financial institution) ownership is positively (negatively) related to disinvestment.

Keywords: disinvestment, listed status, short-termism

JEL Classification: G31, G32, G34

Suggested Citation

French, Joseph J. and Fujitani, Ryosuke and Yasuda, Yukihiro, Under Pressure: Listing Status and Disinvestment in Japan (April 5, 2019). Finance Research Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3405098 or http://dx.doi.org/10.2139/ssrn.3405098

Joseph J. French

University of Northern Colorado ( email )

501 20th Street
Greeley, CO 80639
United States

Ryosuke Fujitani (Contact Author)

Tokyo Keizai University ( email )

Tokyo
Japan
185-8502 (Fax)

Yukihiro Yasuda

Hitotsubashi University ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan

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