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Conflicts of Interest with Directors and Officers in Management Buyouts (MBOs) and their Regulations (Japanese)

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  • KITAGAWA Toru

Abstract

Management buyouts (MBOs), in one respect, involve a profound conflict of interest because they entail the acquisition of a company by its own managers, yet they can also give management the incentive to pursue efficient reorganization. Generally speaking, the problem of conflicts of interest between management and shareholders has, until now, been argued from the point of minority shareholder protection. This paper will try to solve this problem from the standpoint of management's incentive in terms of effectively using deal protection provisions. This paper divides management buyouts into four categories; from the objective perspective of whether or not a there is place for price negotiations between buyers and sellers, and from the subjective perspective of what management's motivations and objectives are for implementing MBOs. Then the paper proposes optimal regulations for each category of management buyout by referring to the MBO rules of conduct in the United States.

Suggested Citation

  • KITAGAWA Toru, 2007. "Conflicts of Interest with Directors and Officers in Management Buyouts (MBOs) and their Regulations (Japanese)," Policy Discussion Papers (Japanese) 07001, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:rpdpjp:07001
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    File URL: https://www.rieti.go.jp/jp/publications/pdp/07p001.pdf
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    1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, January.
    2. Alan M. Taylor, 1996. "Convergence and International Factor Flows in Theory and History," NBER Working Papers 5798, National Bureau of Economic Research, Inc.
    3. Fujita, Masahisa & Krugman, Paul & Mori, Tomoya, 1999. "On the evolution of hierarchical urban systems1," European Economic Review, Elsevier, vol. 43(2), pages 209-251, February.
    4. Fujita, Masahisa & Tabuchi, Takatoshi, 1997. "Regional growth in postwar Japan," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 643-670, November.
    5. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-1219, December.
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