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Does governance matter? Performance and corporate governance structures of Japanese keiretsu groups

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  • Moerke, Andreas

Abstract

The paper presents an investigation of 72 Japanese manufacturing firms from five different industries with the focus on horizontal industrial groups (keiretsu). Data source was the Kaisha Database at the Science Center Berlin. The main findings are: Using the hexagon criterion to estimate the excellence of firms, the independent firms achieved better results. Thus we conclude that belonging to a keiretsu is no longer a guarantee for the success of a company. A different bank-firm relationship leads to different income distribution: the „old” keiretsu pay higher wages while the independent firms pay more dividend per share. Our best speculation is that the “old” keiretsu are still somewhat isolated from the market and the independent firms have to be more attractive to their shareholders. The structure of the boards of directors differs in following points: keiretsu firms have clearly larger boards than independent firms. Independent firms have on the average less directors dispatched from financial institutions, but do have a higher number of outsiders. They appoint more amakudari bureaucrats from the Bank of Japan and the Ministry of Finance to outbalance the better bank-firm relations of the keiretsu. The keiretsu, however, appoint more bureaucrats from state institutions related directly to their business.

Suggested Citation

  • Moerke, Andreas, 1997. "Does governance matter? Performance and corporate governance structures of Japanese keiretsu groups," Discussion Papers, Research Unit: Market Dynamics FS IV 97-43, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbmdy:fsiv9743
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    References listed on IDEAS

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    1. Takeo Hoshi & Anil Kashyap & David Scharfstein, 1991. "Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(1), pages 33-60.
    2. Albach, Horst & Moerke, Andreas, 1996. "Die Überlegenheit der japanischen Unternehmen im globalen Wettbewerb," Discussion Papers, Research Unit: Market Dynamics FS IV 96-4, WZB Berlin Social Science Center.
    3. Moerke, Andreas, 1997. "Japanische Unternehmensgruppen: Eine empirische Analyse," Discussion Papers, Research Unit: Market Dynamics FS IV 97-42, WZB Berlin Social Science Center.
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    1. Mosley, Hugh & Mayer, Antje, 1999. "Benchmarking national labour market performance: A radar chart approach," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 99-202, WZB Berlin Social Science Center.
    2. Albach, Horst & Görtzen, Ulrike & Miarka, Tobias & Moerke, Andreas & Westphal, Thomas & Zobel, Rita, 1997. "Dokumentation der Kaisha-Datenbank - Zur Datenbank der Jahresabschlüsse japanischer Industrieaktiengesellschaften 1970-1997," Discussion Papers, Research Unit: Market Dynamics FS IV 97-39, WZB Berlin Social Science Center.
    3. Albach, Horst & Görtzen, Ulrike & Miarka, Tobias & Moerke, Andreas & Westphal, Thomas & Zobel, Rita, 2000. "Documentation of the Kaisha-Database - The annual accounts database of Japanese stock companies 1970-1999. With a detailed glossary of Japanese accounting terminology," Discussion Papers, Research Unit: Market Dynamics FS IV 00-10, WZB Berlin Social Science Center.

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