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Creditor-Focused Corporate Governance: Evidence from Mergers and Acquisitions in Japan

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  • Mehrotra, Vikas
  • Schaik, Dimitri van
  • Spronk, Jaap
  • Steenbeek, Onno

Abstract

Mergers in Japan have the dubious distinction of not creating wealth for shareholders of target firms, in sharp contrast to much of the rest of the world. Using a sample of 91 mergers from 1982 through 2003 we document several distinctive features of the merger market in Japan: mergers tend to be countercyclical and often orchestrated by a common main bank. Overall our results point to a market for corporate control that is distinctly less shareholder-focused than that in the U.S., and one where creditors play an important, perhaps dominant, role in corporate governance.

Suggested Citation

  • Mehrotra, Vikas & Schaik, Dimitri van & Spronk, Jaap & Steenbeek, Onno, 2009. "Creditor-Focused Corporate Governance: Evidence from Mergers and Acquisitions in Japan," CEI Working Paper Series 2009-01, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2009-01
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    Cited by:

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    2. Guojie Ma, 2016. "Corporate Behaviour and Market Integration: Evidence from the Asia-Pacific Real Estate Market," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 3-2016, January-A.
    3. Randall Morck & Bernard Yeung, 2017. "East Asian Financial and Economic Development," Working Papers id:12112, eSocialSciences.
    4. Kentaro Kaneko & Reiko Kashiwazaki & Fumiko Takeda, 2020. "Does Japanese Business Group Membership Improve Post-Merger Performance?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(1), pages 45-57, February.
    5. repec:uts:finphd:35 is not listed on IDEAS
    6. Fatemi, Ali M. & Fooladi, Iraj & Garehkoolchian, Niloofar, 2017. "Gains from mergers and acquisitions in Japan," Global Finance Journal, Elsevier, vol. 32(C), pages 166-178.
    7. Wang, Haibo, 2024. "Assessing resilience to systemic risks across interbank credit networks using linkage-leverage analysis: Evidence from Japan," International Review of Financial Analysis, Elsevier, vol. 94(C).
    8. Henrique Castro Martins, 2020. "The Brazilian bankruptcy law reform, corporate ownership concentration, and risk‐taking," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 562-573, June.
    9. Vikas Mehrotra & Randall Morck, 2017. "Governance and Stakeholders," NBER Working Papers 23460, National Bureau of Economic Research, Inc.
    10. Masatoshi Kato & Koichiro Onishi & Yuji Honjo, 2022. "Does patenting always help new firm survival? Understanding heterogeneity among exit routes," Small Business Economics, Springer, vol. 59(2), pages 449-475, August.
    11. Sasaki, Toshinori & Suzuki, Katsushi, 2019. "Bank health and cash holdings: Evidence from a bank-centered financial market," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).

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    More about this item

    Keywords

    Japanese mergers; Japanese corporate governance;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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