Large Shareholders and Banks: Who Monitors and How?

19 Pages Posted: 8 Mar 2003

See all articles by Yishay Yafeh

Yishay Yafeh

Hebrew University of Jerusalem - Jerusalem School of Business Administration; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Oved Yosha

Tel Aviv University - The Eitan Berglas School of Economics (Deceased)

Abstract

Using a sample of Japanese firms in the chemical industry, we show that concentrated shareholding is associated with lower expenditure on activities with scope for managerial private benefits. We interpret this as evidence of a hitherto undocumented form of monitoring by large shareholders. We examine whether such monitoring is also performed by banks and other creditors. The results in the metal product industry are roughly similar, but we find no evidence of this type of monitoring in the Japanese electronics industry, and suggest a number of explanations.

Suggested Citation

Yafeh, Yishay and Yosha, Oved, Large Shareholders and Banks: Who Monitors and How?. The Economic Journal, Vol. 113, pp. 128-146, 2003. Available at SSRN: https://ssrn.com/abstract=376579

Yishay Yafeh (Contact Author)

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem 91905
Israel
+972 2 588 3081 (Phone)
+972 2 588 1341 (Fax)

HOME PAGE: http://bschool.huji.ac.il/facultye/yafeh/

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Oved Yosha

Tel Aviv University - The Eitan Berglas School of Economics (Deceased)

N/A

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