Corporate Governance and the Costs of Public Debt Financing: Evidence from Japan

Takanori Tanaka ()
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Takanori Tanaka: Faculty of Economics, Ritsumeikan University

No 11-35, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper explores the relation between corporate governance mechanisms in Japan and the costs of public debt financing. Using a sample of Japanese corporate bond issues during the period 2005-2008, we find that CEO ownership is associated with higher yield spreads after controlling for firm- and bond-specific characteristics. Founding family ownership is also positively related to yield spreads. In contrast, firms with large corporate shareholders enjoy lower yield spreads. These results are robust to various alternative specifications. Overall, our results indicate that corporate governance mechanisms in Japan are important factors affecting the costs of public debt financing.

Keywords: Yield spreads; Ownership structure; Corporate governance (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011-12
New Economics Papers: this item is included in nep-bec
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