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Organization Studies
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Ownership Structure, Investment Behaviour and Firm Performance in Japanese Manufacturing Industries

Eric Gedajlovic

University of Connecticut, USA, egedajlovic{at}business.uconn.edu

Toru Yoshikawa

Singapore Management University, Singapore, toru{at}smu.edu.sg

Motomi Hashimoto

Nomura Research Institute Ltd, Tokyo, Japan, m1-hashimoto{at}nri.co.jp

Using data spanning the 1996-98 fiscal years of 247 of Japan’s largest manufacturers, we empirically evaluate the extent to which a firm’s investment behaviour and financial performance are influenced by its ownership structure. To do so, we examine six distinct categories of Japanese shareholders: foreign investors, investment funds, pension funds, banks and insurance companies, affiliated companies and insiders. Our findings strongly indicate that the relationship between the equity stakes of a particular category of investor and a firm’s financial performance and investment behaviour is considerably more complex than is depicted in simple principal-agent representations. Such a result emphasizes the importance of making finely grained and contextually relevant distinctions when modelling and evaluating corporate governance relations.

Key Words: ownership • foreign investors • institutional investors • corporate governance • Japan • dividends • capital expenditures

Organization Studies, Vol. 26, No. 1, 7-35 (2005)
DOI: 10.1177/0170840605046346
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T. Yoshikawa, P. H. Phan, and P. David
The Impact of Ownership Structure on Wage Intensity in Japanese Corporations
Journal of Management, April 1, 2005; 31(2): 278 - 300.
[Abstract] [PDF]