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EMPLOYMENT POLICY AND CORPORATE GOVERNANCE An Empirical Analysis on the Stakeholder Model in Japan

Author

Listed:
  • ABE Naohito
  • SHIMIZUTANI Satoshi

Abstract

Japan's employee-based corporate governance is in a far-reaching transition, and has a larger presence of outside directors as board members in the 1990s. We examine how board composition affects measures for employment downsizing by constructing a unique firm-level measurement of excess employment with composition of board members in Japanese listed companies in 2001. Our findings confirm that outsiders are more motivated to commit to wage cuts and layoffs, or to increase voluntary (early) retirements, while insiders are more inclined to commit to decreases in new hiring. This implies that outsiders contribute to employment downsizing and insiders are more inclined to protect incumbent employees. Those findings are consistent with the stakeholder view on firms, rather than a profit-maximizing firms, as the neoclassical microeconomic theory assumes.

Suggested Citation

  • ABE Naohito & SHIMIZUTANI Satoshi, 2005. "EMPLOYMENT POLICY AND CORPORATE GOVERNANCE An Empirical Analysis on the Stakeholder Model in Japan," ESRI Discussion paper series 136, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esj:esridp:136
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    File URL: http://www.esri.go.jp/jp/archive/e_dis/e_dis140/e_dis136a.pdf
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    Cited by:

    1. Bahaudin G Mujtaba, 2019. "Leadership Orientation of Afghan and Japanese Respondents: A Study of “Guzaara†or Getting Along in Asia," Information Management and Business Review, AMH International, vol. 11(1), pages 24-39.
    2. Tobias Cramer, 2016. "Work-Related Cultural Values of Japanese and Czech Students," Eurasian Journal of Social Sciences, Eurasian Publications, vol. 4(2), pages 22-37.

    More about this item

    Keywords

    corporate governance; employment downsizing; multivariate probit model JEL classification: G30; J23.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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