Does Restructuring Pay in Japan? Evidence Following the Lost Decade
AbstractAfter a decade of sluggish economic growth in the 1990s, it remains an open question whether and how Japanese firms have restructured their operations, and whether these efforts have borne any fruit. Using a randomly selected sample of 300 firms from the Tokyo Stock Exchange, we collect all restructuring announcement in the 2001-2002 period. Our results are striking in that while we do find that firms engaging in restructurings of various sorts display improved earnings in the period following the restructuring announcement, shareholders do not appear to benefit from such tangible earnings improvements. After a decade of lost opportunities, market participants in Japan remain skeptical of the sustainability of such restructuring efforts (that is, will the firms revert to their "bad old ways" when the immediate crisis is over).
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2008-16.
Length: 25,  p.
Date of creation: Jul 2008
Date of revision:
Japanese corporate restructuring; restructuring announcements;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-06 (All new papers)
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