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Large Shareholders and Banks: Who Monitors and How?

Author

Listed:
  • Yishay Yafeh

    (The Hebrew University of Jerusalem and The University of Montreal)

  • Oved Yosha

    (Tel Aviv University and CEPR)

Abstract

Using a sample of Japanese firms in the chemical industry, we show that concentrated shareholding is associated with lower expenditure on activities with scope for managerial private benefits. We interpret this as evidence of a hitherto undocumented form of monitoring by large shareholders. We examine whether such monitoring is also performed by banks and other creditors. The results in the metal product industry are roughly similar, but we find no evidence of this type of monitoring in the Japanese electronics industry, and suggest a number of explanations. Copyright Royal Economic Society 2003.

Suggested Citation

  • Yishay Yafeh & Oved Yosha, 2003. "Large Shareholders and Banks: Who Monitors and How?," Economic Journal, Royal Economic Society, vol. 113(484), pages 128-146, January.
    • Handle: RePEc:ecj:econjl:v:113:y:2003:i:484:p:128-146
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