Measuring the Extent and Implications of Corporate Political Connections in Prewar Japan

Tetsuji Okazaki and Michiru Sawada
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Tetsuji Okazaki: Faculty of Economics, The University of Tokyo

No CIRJE-F-946, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This paper investigates the extent, determinants, and implications of the political connections of firms at the peak of democracy in prewar Japan, identifying a firm as politically connected if one of its directors was simultaneously a member of the House of Representatives. We analyze the data of publicly traded companies in the periods before and after the 1928 and 1930 general elections. It is found that almost 20 % of publicly traded companies had political connections through politician directors. Regressions analyses reveal that smaller or badly performing firms and firms in the electric utilities and railroad industries, where government licenses were important, were more likely to have political connections. Furthermore, we find that the stock returns of firms that had new political connections improved from the pre-election period to the post-election period.

Pages: 32 pages
Date: 2014-11
New Economics Papers: this item is included in nep-cdm, nep-his and nep-pol
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Measuring the extent and implications of corporate political connections in prewar Japan (2017)
Working Paper: Measuring the extent and implications of corporate political connections in prewar Japan (2016)
Working Paper: Measuring the extent and implications of corporate political connections in prewar Japan (2016)
Working Paper: Measuring the extent and implications of corporate political connections in prewar Japan (2014)
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