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The Emergence of Portfolio Restructuring in Japan

Author

Listed:
  • Zhonghua Wu

    (National University of Singapore)

  • Andrew Delios

    (National University of Singapore)

Abstract

We examine the role of stakeholders as an influence in the practice of portfolio restructuring. We contend that with the presence and creation of new legal arrangements and regulations, portfolio restructuring achieved widespread usage, but only when the initiatives were consistent with the interests of the most powerful social actors in a firm. Building on a stakeholder power approach to corporate governance, we examine whether the interests of relational banks, managers, and business groups were consistent with the practices of portfolio restructuring we observed in Japanese firms in the 1998 to 2005 period. Regressions using data on 174 Japanese machinery firms lend support to predictions that portfolio restructuring increases in frequency with the extent to which business groups’ strategies are facilitated and decreases with the degree to which banks’ interests are protected. The association between the frequency of portfolio restructuring and managerial interests depends on the level of managerial ownership.

Suggested Citation

  • Zhonghua Wu & Andrew Delios, 2009. "The Emergence of Portfolio Restructuring in Japan," Management International Review, Springer, vol. 49(3), pages 313-335, June.
    • Handle: RePEc:spr:manint:v:49:y:2009:i:3:d:10.1007_s11575-009-0145-x
    DOI: 10.1007/s11575-009-0145-x
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    2. Hildebrandt, Peter & Oehmichen, Jana & Pidun, Ulrich & Wolff, Michael, 2018. "Multiple recipes for success – A configurational examination of business portfolio restructurings," European Management Journal, Elsevier, vol. 36(3), pages 381-391.
    3. Angélica María Sánchez-Riofrío & Luis Ángel Guerras-Martín & Francisco Javier Forcadell, 2015. "Business portfolio restructuring: a comprehensive bibliometric review," Scientometrics, Springer;Akadémiai Kiadó, vol. 102(3), pages 1921-1950, March.

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