Developing the Research Frontier in Corporate Governance Analysis

Project Results


Discussion Papers

  • RIETI Discussion Paper Series 07-E-056, September 2007

    "The Comparative Features and Economic Role of Mergers and Acquisitions in Japan"


    The Japanese economy is in the midst of a major merger and acquisition (M&A) wave for the first time in the postwar period. This paper puts a spotlight on Japan's M&A activity, which has surged since the end of 1999, and takes a look at the factors that have contributed to the surge, and its various economic dimensions. The paper places Japan's M&As in an international context, and identify the causes of the wave and its structural characteristics (sections 2 and 3). It also examines the economic role of M&A and its pros and cons. We contend that M&As contribute to raising the efficiency of resource allocation and organizations (sections 4 and 5). The last section addresses policy implications and contains concluding remarks.

  • RIETI Discussion Paper Series 07-E-054, September 2007

    "Varieties of Capitalism, Varieties of Markets: Mergers and Acquisitions in Japan, Germany, France, the UK and USA"

    • Gregory JACKSON (King's College London) and MIYAJIMA Hideaki (Faculty Fellow, RIETI / Waseda University, NIFS)
    • Full text in English [PDF: 252KB]


    This paper compares the characteristics of M&A in 1991-2005 across five countries: Japan, France, Germany, the UK and USA. We ask what factors explain the growth of M&A markets across these countries, and what similarities and differences exist in the ways the M&A market operates. We find that the growth of M&A reflects a rather similar combination of sectoral, international, and financial factors. However, despite some convergence toward increasing levels, we find important differences in the characteristics of M&A transactions that reflect institutional differences found within different national 'varieties of capitalism'. We find systematic differences between what Hall and Soskice (2001) call liberal market economies (UK and USA) and coordinated market economies (Japan, France, and Germany) across a wide range of in deal characteristics: takeover bids, the size of stakes purchased, the prior stakes held, the use of private negotiation, degree of hostility, and takeover premium. In line with theories of the social embeddedness of markets (Granovetter 1985), we find that in countries with 'coordinated' market economies, M&A reflects greater 'coordination' of transactions through on going business relations. As such, the market for corporate control does not necessary entail a convergence of national business systems, but a pattern of change influenced by strong continuities.

  • RIETI Discussion Paper Series 07-E-042, May 2007

    "Understanding the M&A boom in Japan: What drives Japanese M&A?"

    • ARIKAWA Yasuhiro (Waseda University, NIFS) and MIYAJIMA Hideaki (Faculty Fellow, RIETI / Waseda University, NIFS)
    • Full text in English [PDF: 281KB]


    In this paper, we examine the causes of the first merger boom since the late 1990s in Japan. Using industry-level data, we show that mergers and acquisitions (M&As) are driven mainly by economic shocks. While industries with higher growth opportunities are likely to have more M&A activity, industries facing negative fundamental shocks, such as rapid sales declines, also experience larger M&A deals. These results suggest that the recent merger wave in Japan is mainly explained by the neoclassical model. At the firm level, we find that the bidder is the firm with the higher growth opportunity, and the target is the one with the lower growth opportunity. This means that Japanese firms improved their efficiency through merger activity since the 1990s. Lastly, we find that internal funds for the acquiring firm play a very important role in bidding activity, while a high probability of being targeted for M&A is associated with high leverage.

  • RIETI Discussion Paper Series 07-E-030, May 2007

    "Does Corporate Culture Matter? An Empirical Study on Japanese Firms"

    • HIROTA Shinichi (Waseda University), KUBO Katsuyuki (Waseda University), and MIYAJIMA Hideaki (Faculty Fellow, RIETI / Waseda University, NIFS)
    • Full text in English [PDF: 170KB]


    Corporate culture does matter. Using Japanese firms' data from 1987-2000, we have shown that the strength of corporate culture significantly affects corporate policies such as employment policy, management structure, and financial structure. We have also confirmed that the culture and its embedding contribute to better corporate performance. These culture effects are found to be considerable in magnitude and at least as large as those of other factors. We suggest that it is important to recognize the existence of the culture for understanding corporate policies and performance.

Referred Journal Articles


YAOITA Shumpei (Research Assistant, RIETI)