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

Author Info

  • 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.

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File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/17748/1/wp2009-1a.pdf
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Paper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2009-01.

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Length: 33 p.
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:hit:hitcei:2009-01
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Keywords: Japanese mergers; Japanese corporate governance;

Other versions of this item:

Find related papers by 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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  1. Sheard, Paul, 1989. "The main bank system and corporate monitoring and control in Japan," Journal of Economic Behavior & Organization, Elsevier, vol. 11(3), pages 399-422, May.
  2. Hanazaki, Masaharu & Horiuchi, Akiyoshi, 2000. "Is Japan's Financial System Efficient?," Oxford Review of Economic Policy, Oxford University Press, vol. 16(2), pages 61-73, Summer.
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  4. Melicher, Ronald W & Rush, David F, 1974. "Evidence on the Acquisition-Related Performance of Conglomerate Firms," Journal of Finance, American Finance Association, vol. 29(1), pages 141-49, March.
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  14. Aoki, Masahiko, 1990. "Toward an Economic Model of the Japanese Firm," Journal of Economic Literature, American Economic Association, vol. 28(1), pages 1-27, March.
  15. repec:dgr:kubtil:2006003 is not listed on IDEAS
  16. Servaes, Henri, 1991. " Tobin's Q and the Gains from Takeovers," Journal of Finance, American Finance Association, vol. 46(1), pages 409-19, March.
  17. Bradley, Michael & Desai, Anand & Kim, E. Han, 1988. "Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms," Journal of Financial Economics, Elsevier, vol. 21(1), pages 3-40, May.
  18. Lin, Bing-Xuan & Michayluk, David & Oppenheimer, Henry R. & Reid, Sean F., 2008. "Hubris amongst Japanese bidders," Pacific-Basin Finance Journal, Elsevier, vol. 16(1-2), pages 121-159, January.
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Cited by:

  1. USHIJIMA Tatsuo & Ulrike SCHAEDE, 2013. "The Market for Corporate Subsidiaries in Japan: An empirical study of trades among listed firms," Discussion papers 13012, Research Institute of Economy, Trade and Industry (RIETI).

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