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The impact of corporate governance on corporate performance: Evidence from Japan

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  • Bauer, Rob
  • Frijns, Bart
  • Otten, Rogér
  • Tourani-Rad, Alireza

Abstract

Employing a unique data set provided by Governance Metrics International, which rates firms using six different corporate governance dimensions, we analyze whether Japanese firms with many governance provisions have a better corporate performance than firms with few governance provisions. Employing an overall index, we find that well-governed firms significantly outperform poorly governed firms by up to 15% a year. Using indices for various governance categories, we find that not all categories affect corporate performance. Governance provisions that deal with financial disclosure, shareholder rights, and remuneration do affect stock price performance. The impact of provisions that deal with board accountability, market for control, and corporate behavior is limited.

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Bibliographic Info

Article provided by Elsevier in its journal Pacific-Basin Finance Journal.

Volume (Year): 16 (2008)
Issue (Month): 3 (June)
Pages: 236-251

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Handle: RePEc:eee:pacfin:v:16:y:2008:i:3:p:236-251

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Web page: http://www.elsevier.com/locate/pacfin

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Citations

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Cited by:
  1. Monda, Barbara & Giorgino, Mrco, 2013. "Corporate Governance and Shareholder Value in Listed Firms: An Empirical Analysis in Five Countries (France, Italy, Japan, UK, USA)," MPRA Paper 45422, University Library of Munich, Germany.
  2. Lee, Shih-Cheng & Lin, Chien-Ting & Chang, Pei-Ting, 2011. "An Ohlson valuation framework for valuing corporate governance: The case of Taiwan," Pacific-Basin Finance Journal, Elsevier, vol. 19(4), pages 420-434, September.
  3. Yves Bozec & Richard Bozec & Mohamed Dia, 2010. "Overall governance, firm value and deviation from one share: one vote principle," International Journal of Managerial Finance, Emerald Group Publishing, vol. 6(4), pages 305-328, September.
  4. Emilia Peni, 2014. "CEO and Chairperson characteristics and firm performance," Journal of Management and Governance, Springer, vol. 18(1), pages 185-205, February.
  5. Trabelsi, Mohamed Ali, 2009. "Governance and performance of Tunisian banks," MPRA Paper 26657, University Library of Munich, Germany, revised 2009.

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