Corporate Governance Reforms under the Abenomics : the Economic Consequences of Two Codes

54 Pages Posted: 20 Oct 2020

See all articles by Hideaki Miyajima

Hideaki Miyajima

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

Takuji Saito

Graduate School of Business Administration, Keio University

Date Written: October 19, 2019

Abstract

Corporate governance reform has been one of the central issues in the "third arrow" of the Abe administration's economic revival program. The Japanese Stewardship Code was introduced in 2014, followed by the Corporate Governance Code in 2015. This study quantifies how the reform changed the corporate governance of Japanese firms. First, we examine the changes in institutional ownership, cross-holdings and board structure following the reforms. Then, we study whether changes in ownership structure and board structure affect firm behavior and performance. We find that the introduction of the Stewardship Code is associated with more institutional ownership especially in mid-sized firms. Firms with few outside directors increased the number of outside directors to follow the Corporate Governance Code. However, the increase in institutional ownership and outside directors did not promote risk taking behavior or improve firm performance.

Keywords: Corporate governance; Institutional investors; Board of directors

JEL Classification: G18, G23, G32, G34, G35

Suggested Citation

Miyajima, Hideaki and Saito, Takuji, Corporate Governance Reforms under the Abenomics : the Economic Consequences of Two Codes (October 19, 2019). Available at SSRN: https://ssrn.com/abstract=3684372 or http://dx.doi.org/10.2139/ssrn.3684372

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

Takuji Saito

Graduate School of Business Administration, Keio University ( email )

Japan

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