Corporate Governance and Corporate Social Responsibility: The incidence of foreign participation to the capital in Japanese firms

The agency theory emphasizes the need to develop control mechanisms and incentive mechanisms in agency relationship in a context of asymmetry of information (Jensen and Meckling, 1976). When foreign investors tried to take profit from the collapse and longstanding low levels of the stock exchange in Japan, they felt they were in a strong asymmetry of information situation. Japanese businesses were managed in a Japanese way which at that time was not always easy to understand by foreign partners – not always transparent they would say (Amann, Caby, Jausaud, Piniero, 2007; Aoki, G. Jackson and H. Miyajima, 2007; Colpan, A.M., Yoshikawa, T., Hikino, T. and Miyoshi, H., 2007). Thus they asked for strengthened corporate governance and Corporate Social Responsibility, as emphasized in some mediatized cases (Amann, Jausaud, Kanie, 2004). Looking for more transparency leads to both more formalized corporate governance and other dimensions of Corporate Social Responsibility. Corporate governance is one dimension of Corporate Social Responsibility, in addition to Social and Environmental dimensions. In this contribution, we will check using regression analysis on a broad basis (209 cases drawn from Toyo Keizai, 2010 and 2015 editions), whether foreign participation to the capital actually has an influence on Corporate governance of Japanese companies and other Corporate Social Responsibility dimensions, namely Social and Environmental dimensions.