This paper examines the relationship between the level of managerial compensation and the quality of corporate governance in Japan in the period following the bubble burst of 1991-1995. There are three main findings. First, Japanese firms with weaker governance have greater agency problems in that managerial opportunism extracts higher compensation and the firm performs relatively worse. Second, these agency problems were more severe during the recessionary period of 1994-1995. Finally, governance structures in industries with higher managerial compensation are relatively weaker than in other industries. Copyright 2008 The Authors. Journal compilation 2008 East Asian Economic Association and Blackwell Publishing Ltd.
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Article provided by East Asian Economic Association in its journal Asian Economic Journal.
Volume (Year): 22 (2008) Issue (Month): 4 (December) Pages: 431-455 Download reference. The following formats are available: HTML
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