Corporate Governance and Firm Performance: A Comparative Analysis between Listed Family and Non-Family Firms in Japan

Kojima Koji, Bishnu Kumar Adhikary and Le Tram
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Kojima Koji: School of International Studies, Kwansei Gakuin University, Nishinomiya 662-8501, Japan
Bishnu Kumar Adhikary: Doshisha Business School, Doshisha University, Kyoto 6028580, Japan
Le Tram: Zurich Insurance Company Ltd, Tokyo 1640003, Japan

JRFM, 2020, vol. 13, issue 9, 1-20

Abstract: This study aims to explore the relationship between corporate governance and financial performance of publicly listed family and non-family firms in the Japanese manufacturing industry. The study obtains data from Bloomberg over the period 2014–2018 and covers 1412 firms comprising of 861 non-family and 551 family firms. Our results show that family firms outperform non-family counterparts in terms of return on assets (ROA) and Tobin’s Q when a univariate analysis is invoked. On multivariate analysis, family firms show superior performance to non-family firms with Tobin’s Q. However, family ownership negates firm performance when ROA is taken into account. Regarding the impact of governance elements on Tobin’s Q, institutional shareholding appears to be a significant and positive factor for promoting the performance of both family and non-family firms. Furthermore, board size encourages the performance of non-family firms, while such influence is not observed for family firms. In terms of ROA, foreign ownership inspires the performance of both family and non-family firms. Moreover, government ownership stimulates the performance of family firms, while board independence significantly negates the same. Besides, we find that the performance of family firms run by the founder’s descendants is superior to that of family firms run by the founder. These findings have critical policy implications for family firms in Japan.

Keywords: family firm; non-family firm; corporate governance; corporate performance; Japan (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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