EconPapers    
Economics at your fingertips  
 

The impact of foreign investors on the risk-taking of Japanese firms

Pascal Nguyen

MPRA Paper from University Library of Munich, Germany

Abstract: Consistent with a bank-centered governance system, Japanese firms exhibit an exceptionally low level of performance variability. The increased involvement of foreign investors motivated by shareholder value is thus likely to have triggered a major shift in their risk-taking behavior. My results confirm this assumption as all standard measures of performance volatility appear to have significantly increased with the level of foreign ownership. Controlling for endogeneity provides higher point estimates supporting anecdotal evidence that foreign investors have targeted firms taking unusually low risk. Overall, the evidence highlights the considerable impact that this category of investors can have on a firm’s decisions and, by consequence, on its performance.

Keywords: foreign ownership; monitoring; risk taking; performance volatility (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2012-04-10
New Economics Papers: this item is included in nep-cfn and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/38991/1/MPRA_paper_38991.pdf original version (application/pdf)

Related works:
Journal Article: The impact of foreign investors on the risk-taking of Japanese firms (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38991

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2024-03-31
Handle: RePEc:pra:mprapa:38991