Do Japanese CEOS Matter?

36 Pages Posted: 28 Jun 2004 Last revised: 12 May 2014

See all articles by Sanghoon Ahn

Sanghoon Ahn

Hitotsubashi University - Faculty of Economics

Utpal Bhattacharya

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

Taehun Jung

Hitotsubashi University - Institute of Economic Research

Giseok Nam

Hitotsubashi University - Institute of Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: March 27, 2009

Abstract

In a country where individualism is emphasized less than in Western countries, we ask whether the CEO (shacho) of a Japanese corporation positively affects firm performance. To answer this question, we construct a shacho-firm matched panel data set in the period 1990 through 2002 of all listed 1,419 Japanese manufacturing firms and their 3,520 shachos. Though we find a positive abnormal stock return on the date a shacho change is announced, especially when the shacho change is non-routine, we document that this effect is short-lived. There seems to be no long-run positive change in performance or policies after a shacho change, even when the shacho change is non-routine. Finally, in trying to explain firm performance or policies, we attempt to separate a firm-fixed effect from a shacho-fixed effect, and are unable to disentangle a shacho-fixed effect. We are thus left to conclude that shachos do not positively matter in the Japanese corporation in this decade of a stagnant economy.

Keywords: CEO Turnover, Agency Theory, Corporate Governance, Japanese Firms

JEL Classification: G30, G34, F30, J63

Suggested Citation

Ahn, Sanghoon and Bhattacharya, Utpal and Jung, Taehun and Nam, Giseok, Do Japanese CEOS Matter? (March 27, 2009). Available at SSRN: https://ssrn.com/abstract=559002 or http://dx.doi.org/10.2139/ssrn.559002

Sanghoon Ahn

Hitotsubashi University - Faculty of Economics ( email )

Tokyo, 186-8601
Japan

Utpal Bhattacharya (Contact Author)

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management ( email )

Clear Water Bay
Kowloon
Hong Kong

Taehun Jung

Hitotsubashi University - Institute of Economic Research ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan

Giseok Nam

Hitotsubashi University - Institute of Economic Research ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan

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