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Power Balance of Equity and Corporate Performance

In: The 19th International Conference on Industrial Engineering and Engineering Management

Author

Listed:
  • Jian Su

    (Northeastern University
    Shenyang University)

  • Xiaoming Ji

    (Northeastern University)

Abstract

Not many theories were about how the power balance affected the corporate governance. The paper investigates whether and how the power’s balance can affect the performance of Japanese listed companies. With sample data of companies listed on Tokyo Stock Exchange, it was interpreted that Return on Assets (ROA) could be regressed on TOP1 (the radio of the largest shareholder), TOP2 (the ratio of the second shareholder) and TOP3 (the ratio of the third shareholder) respectively. The empirical results showed: firstly, TOP1 is negatively related to ROA; secondly, TOP2 is positively related to ROA; finally, TOP3 is negatively related to ROA. These results suggested that reducing the ratio of cross-shareholding, and enhancing the impact of the second largest shareholder are the effective ways to improve corporate earning.

Suggested Citation

  • Jian Su & Xiaoming Ji, 2013. "Power Balance of Equity and Corporate Performance," Springer Books, in: Ershi Qi & Jiang Shen & Runliang Dou (ed.), The 19th International Conference on Industrial Engineering and Engineering Management, edition 127, chapter 0, pages 1019-1024, Springer.
    • Handle: RePEc:spr:sprchp:978-3-642-38427-1_107
    DOI: 10.1007/978-3-642-38427-1_107
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