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Corporate Governance and the Costs of Public Debt Financing: Evidence from Japan

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  • Takanori Tanaka

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    (Faculty of Economics, Ritsumeikan University)

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    Abstract

    This paper explores the relation between corporate governance mechanisms in Japan and the costs of public debt financing. Using a sample of Japanese corporate bond issues during the period 2005-2008, we find that CEO ownership is associated with higher yield spreads after controlling for firm- and bond-specific characteristics. Founding family ownership is also positively related to yield spreads. In contrast, firms with large corporate shareholders enjoy lower yield spreads. These results are robust to various alternative specifications. Overall, our results indicate that corporate governance mechanisms in Japan are important factors affecting the costs of public debt financing.

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1135.pdf
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    Bibliographic Info

    Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 11-35.

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    Length: 33 pages
    Date of creation: Dec 2011
    Date of revision:
    Handle: RePEc:osk:wpaper:1135

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    Web page: http://www.econ.osaka-u.ac.jp/
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    Keywords: Yield spreads; Ownership structure; Corporate governance;

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