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Corporate governance, political involvement, and internationalization: An empirical investigation in Japan and Taiwan

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  • Chen, Li-Wen
  • Yu, Hsin-Yi

Abstract

This paper investigates the effects of intervention by government and financial institutions on the degree of internationalization in Japan and Taiwan, with particular attention to the impact of the main bank system and the system of amakudari (the appointment of retired bureaucrats to the boards of public companies). The empirical results indicate that companies with a higher degree of internationalization have boards with stronger monitoring ability and therefore can fend off intervention by government. On the other hand, a negative relationship is established between the presence of retired bureaucrats on boards (amakudari) and the subsequent degree of internationalization. Similarly, intervention by financial institutions results in a lower subsequent degree of internationalization. Thus, although representatives of government and financial institutions may attempt to use their influence to prompt international expansion, the monitoring ability of the board may be jeopardized, to the detriment of internationalization.

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  • Chen, Li-Wen & Yu, Hsin-Yi, 2017. "Corporate governance, political involvement, and internationalization: An empirical investigation in Japan and Taiwan," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 640-655.
    • Handle: RePEc:eee:riibaf:v:39:y:2017:i:pa:p:640-655
    DOI: 10.1016/j.ribaf.2016.07.023
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    1. Kojima Koji & Bishnu Kumar Adhikary & Le Tram, 2020. "Corporate Governance and Firm Performance: A Comparative Analysis between Listed Family and Non-Family Firms in Japan," JRFM, MDPI, vol. 13(9), pages 1-20, September.
    2. Stefan Schmid & Felix Roedder, 2022. "Much ado about diversity? The perpetuation of old elites on corporate boards," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3263-3285, December.

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