Managerial Compensation, Corporate Governance, and Business Performance in Japan: Evidence Using New Micro Data
Hideaki Sakawa () and
Naoki Watanabel ()
Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University
This paper examines the relations between the disciplinary role of Japanese relationship-oriented corporate governance mechanisms, such as keiretsu memberships and bank-appointed directors, and pay-performance sensitivity in Japan. Previous studies show that pay-performance sensitivity is positive and almost the same as in a market-oriented system like that of the USA. However, under the Japanese relationship-oriented system, pay-performance sensitivity may be controlled by financial keiretsu ties and bank-appointed directors. We find that the disciplinary mechanism of keiretsu memberships and bank-appointed monitors did not function well in Japan in the 1990s.
Keywords: Corporate Governance; Firm Performance; Japan; Keiretsu Memberships; Managerial Compensation (search for similar items in EconPapers)
JEL-codes: G30 G32 J33 L22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd08-031
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