Does Restructuring Pay in Japan? Evidence Following the Lost Decade
AbstractAfter over a decade of sluggish economic growth accompanied by massive fiscal stimulus and government handouts (not unlike the response to the current global crisis) 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. The popular consensus is that Japanese companies did start to implement tough restructuring measures at the start of the 21st century, but there is little evidence describing the scope and ultimate efficacy of such measures. Using a randomly selected sample of 300 firms from the Tokyo Stock Exchange, we collect all restructuring announcement made in the aftermath of the so-called lost decade, specifically in the 2000-2001 period. Our results are striking in that while we find that firms engaging in restructuring of various sorts display improved earnings in the period following the restructuring announcement, shareholders do not appear to benefit at the time of the restructuring announcements. Our results are consistent with a model of corporate governance whereby the benefits of restructuring accrue to fixed as opposed to residual claimants, sometimes referred to as a creditor-centric corporate governance system.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2008-20.
Length: 21,  p.
Date of creation: Aug 2009
Date of revision:
Note: July 2008 (Revised on Aug. 2009)
Contact details of provider:
Postal: 2-1 Naka, Kunitachi, Tokyo 186-8603
Web page: http://cei.ier.hit-u.ac.jp/
More information through EDIRC
Japanese corporate restructuring; restructuring announcement;
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, Vacancies, and Immigrant Workers - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-22 (All new papers)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Reiko Suzuki).
If references are entirely missing, you can add them using this form.