The Role of Corporate Governance in Japanese Unlisted Companies

Shin-ichi Fukuda (), Munehisa Kasuya and Jouchi Nakajima
Additional contact information
Munehisa Kasuya: Department of Economics, Meisei University

No CIRJE-F-1081, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: The purpose of this paper is to examine the effects of corporate governance on the performance of Japanese unlisted companies from 1997 to 2002, when the problem of non-performing loans became serious. Using data of unlisted companies, we examine to what extent the ownership structure has a significant impact on firm’s performance. When estimating the determinants of Tobin’s q, we find that the ownership structure has a significant influence on the performance of each unlisted company. However, the impact was totally different between companies with good performance and bad performance. In particular, the increase in the shareholding ratio of a specific individual or a parent company worked positively for companies with good performance, but it worked negatively for companies with poor performance. The results suggest that the distorted governance structure in unlisted companies, which had worked well during the bubble economy, may have significantly restricted their recovery under prolonged recession in Japan.

Pages: 44 pages
Date: 2018-03
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Citations: View citations in EconPapers (8)

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Journal Article: The role of corporate governance in Japanese unlisted companies (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2018cf1081

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