Frontiers in Corporate Governance Analysis

As the Stewardship Code and Corporate Governance Code are executed, governance reform in Japan in principle will enter a new phase of maintaining effective enforcement stemming from the formal arrangement. In order to enhance the performance (earning capability) of Japanese firms further, the reforms should contribute to encourage research and development (R&D), human capital investment, merger and acquisition (M&A), corporate restructuring, and selection of appropriate financial policies, all of which form the base of corporate innovation. However, there is limited research that examines the extent and the channels through which such changes in governance arrangement have influenced corporate behavior. It is also unclear whether the reforms based on the U.S. model are indeed compatible with other economic institutions in Japan such as the long-term employment system, and whether those reforms would induce myopic behavior by firms through excessive external pressure. Considering such problems, this project will highlight the effect of changing governance arrangement on various phases of corporate innovative activities including R&D, human investment, M&A, restructuring, and capital and organizational choice.

August 14, 2017 - July 31, 2019