Stakeholder-Oriented Corporate Governance and Firm-Specific Human Capital: Wage analysis of employer-employee matched data

Kazuhiko Odaki () and Naomi Kodama

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Theories of economic institutions predict that complementarity exists between the nature of corporate governance of a firm and the nature of its human capital investment. The complementarity theory insists that the commitment of a firm and its employees to invest in firm-specific human capital will be reinforced by the commitment of the firm to adopt stakeholder-oriented corporate governance. Using employer-employee matched data from the headquarters of large Japanese firms, this paper investigates the relationship between the wage-tenure profile of a firm and the nature of its corporate governance. Analysis of the wage-tenure profiles shows that firms with stakeholder-oriented corporate governance invest in firm-specific human capital more heavily than those with shareholder-oriented corporate governance.

Pages: 24 pages
Date: 2010-03
New Economics Papers: this item is included in nep-bec, nep-hrm and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:10014

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