Managerial Compensation, Corporate Governance, and Business Performance in Japan: Evidence Using New Micro Data
AbstractThis paper examines the relations between the disciplinary role of Japanese relationship-oriented corporate governance mechanisms, such as keiretsu memberships and bank-appointed directors, and pay-performance sensitivity in Japan. Previous studies show that pay-performance sensitivity is positive and almost the same as in a market-oriented system like that of the USA. However, under the Japanese relationship-oriented system, pay-performance sensitivity may be controlled by financial keiretsu ties and bank-appointed directors. We find that the disciplinary mechanism of keiretsu memberships and bank-appointed monitors did not function well in Japan in the 1990s.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd08-031.
Date of creation: Feb 2009
Date of revision:
Corporate Governance; Firm Performance; Japan; Keiretsu Memberships; Managerial Compensation;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-07 (All new papers)
- NEP-BEC-2009-03-07 (Business Economics)
- NEP-CFN-2009-03-07 (Corporate Finance)
- NEP-LAB-2009-03-07 (Labour Economics)
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