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Does Corporate Culture Matter? An Empirical Study on Japanese Firms

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  • HIROTA Shinichi
  • KUBO Katsuyuki
  • MIYAJIMA Hideaki

Abstract

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.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 07030.

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Length: 35 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:eti:dpaper:07030

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  1. Rafael Rob & Peter Zemsky, 2002. "Social Capital, Corporate Culture, and Incentive Intensity," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 243-257, Summer.
  2. Andrei Shleifer & Lawrence H. Summers, 1988. "Breach of Trust in Hostile Takeovers," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 33-68 National Bureau of Economic Research, Inc.
  3. Raghuram G. Rajan & Luigi Zingales, 2000. "The Governance of the New Enterprise," NBER Working Papers 7958, National Bureau of Economic Research, Inc.
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  5. Luigi Zingales, 2000. "In Search of New Foundations," Journal of Finance, American Finance Association, vol. 55(4), pages 1623-1653, 08.
  6. Eric Van den Steen, 2010. "On the origin of shared beliefs (and corporate culture)," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 617-648.
  7. Raghuram G. Rajan & Luigi Zingales, 1994. "What Do We Know About Capital Structure? Some Evidence from International Data," NBER Working Papers 4875, National Bureau of Economic Research, Inc.
  8. Katsuhito Iwai, 2002. "The Nature of the Business Corporation: Its Legal Structure and Economic Functions," The Japanese Economic Review, Japanese Economic Association, vol. 53(3), pages 243-273.
  9. Carrillo, Juan D. & Gromb, Denis, 1999. "On the strength of corporate cultures," European Economic Review, Elsevier, vol. 43(4-6), pages 1021-1037, April.
  10. Denis Gromb, 2007. "Cultural Inertia and Uniformity in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 23(3), pages 743-771, October.
  11. Ouchi, William, 1981. "Theory Z: How American business can meet the Japanese challenge," Business Horizons, Elsevier, vol. 24(6), pages 82-83.
  12. Chowdhry, Bhagwan & Garmaise, Mark J., 2003. "Organization Capital and Intrafirm Communication," University of California at Los Angeles, Anderson Graduate School of Management qt8j01z46g, Anderson Graduate School of Management, UCLA.
  13. Pascale, Richard Tanner & Athos, Anthony G., 1981. "The art of Japanese management," Business Horizons, Elsevier, vol. 24(6), pages 83-85.
  14. Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
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Cited by:
  1. Ito, Satoshi & Fujimura, Shuzo & Tamiya, Toshihiko, 2012. "Does cultural assimilation affect organizational decision-making on quality-related incidents? — A company's post-M&A experience," Journal of International Management, Elsevier, vol. 18(2), pages 160-179.

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