Publicação
The effect of Japan´s revitalisation strategy on the quality of corporate governance and firm performance
| Resumo: | Japan introduced its corporate governance code in 2015. This paper discusses the code’s effect on firm performance and quality of corporate governance. It examines 170 listed TSE companies in a two-time period panel data setup. In the first part, this paper provides a comprehensive overview on existing literature on corporate governance and firm performance and illustrates Japan’s unique corporate governance system. Then, the compliance with the code’s principles is analysed. In the regression framework the study uses three dependent variables to comprehensively evaluate firm performance represented by return on equity and the quality of corporate governances measured in the management’s quality and independent board member representation. It first employs a simple fixed-effects model to assess if a significant change in the dependent variables can be observed over time. The results suggest an increase in return on equity and independent board member representation. In addition, this study confirms that the size of the board is negatively related with the effectiveness of the board. In the second analysis, the data is split into a control and a treatment group. Companies adapting the principles of the corporate governance code serve as treatment group, non-compliant companies represent the control group. The difference in difference approach does not reveal any additional significant results. This leads to the conclusion that the regulatory change to improve corporate governance and firm performance is not effective. This is a crucial finding for policy-makers in Japan to search for alternative approaches to reinvent the Japanese economy and the social traditions. |
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| Autores principais: | Werner, Jasmin |
| Assunto: | Japan’s corporate governance code Abenomics Firm performance Corporate governance |
| Ano: | 2019 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso restrito |
| Instituição associada: | Universidade Católica Portuguesa |
| Idioma: | inglês |
| Origem: | Veritati - Repositório Institucional da Universidade Católica Portuguesa |
| Resumo: | Japan introduced its corporate governance code in 2015. This paper discusses the code’s effect on firm performance and quality of corporate governance. It examines 170 listed TSE companies in a two-time period panel data setup. In the first part, this paper provides a comprehensive overview on existing literature on corporate governance and firm performance and illustrates Japan’s unique corporate governance system. Then, the compliance with the code’s principles is analysed. In the regression framework the study uses three dependent variables to comprehensively evaluate firm performance represented by return on equity and the quality of corporate governances measured in the management’s quality and independent board member representation. It first employs a simple fixed-effects model to assess if a significant change in the dependent variables can be observed over time. The results suggest an increase in return on equity and independent board member representation. In addition, this study confirms that the size of the board is negatively related with the effectiveness of the board. In the second analysis, the data is split into a control and a treatment group. Companies adapting the principles of the corporate governance code serve as treatment group, non-compliant companies represent the control group. The difference in difference approach does not reveal any additional significant results. This leads to the conclusion that the regulatory change to improve corporate governance and firm performance is not effective. This is a crucial finding for policy-makers in Japan to search for alternative approaches to reinvent the Japanese economy and the social traditions. |
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