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Full-Text Articles in Business Law, Public Responsibility, and Ethics
Strategic Investments In Japanese Corporations: Do Foreign Portfolio Owners Foster Underinvestment Or Appropriate Investment?, Parthiban David, Toru Yoshikawa, Murali D. R. Chari, Abdul A. Rasheed
Strategic Investments In Japanese Corporations: Do Foreign Portfolio Owners Foster Underinvestment Or Appropriate Investment?, Parthiban David, Toru Yoshikawa, Murali D. R. Chari, Abdul A. Rasheed
Research Collection Lee Kong Chian School Of Business
This paper investigates the effect of foreign ownership on strategic investments in Japanese corporations. Foreign owners are typically portfolio investors who frequently buy and sell shares and hold diversified portfolios of small stakes in many firms. Prior research has presented two conflicting perspectives on the role of such investors: (a) their frequent trading leads to pressure for short-term returns that fosters underinvestment; (b) their active trading fosters appropriate investments. We investigated the relationship between foreign ownership and strategic investments using dynamic panel data analysis of a sample of 146 Japanese manufacturing firms from 1991 to 1997. We found that foreign …
Ownership Structure, Investment Behaviour And Firm Performance In Japanese Manufacturing Industries, Eric Gedajlovic, Toru Yoshikawa, Motomi Hashimoto
Ownership Structure, Investment Behaviour And Firm Performance In Japanese Manufacturing Industries, Eric Gedajlovic, Toru Yoshikawa, Motomi Hashimoto
Research Collection Lee Kong Chian School Of Business
Using data spanning the 1996-98 fiscal years of 247 of Japan's largest manufacturers, we empirically evaluate the extent to which a firm's investment behaviour and financial performance are influenced by its ownership structure. To do so, we examine six distinct categories of Japanese shareholders: foreign investors, investment funds, pension funds, banks and insurance companies, affiliated companies and insiders. Our findings strongly indicate that the relationship between the equity stakes of a particular category of investor and a firm' s financial performance and investment behaviour is considerably more complex than is depicted in simple principal-agent representations. Such a result emphasizes the …