Benefits and costs of Japanese system of corporate governance*

Abstract

Corporate governance can be defined as the way the management of a firm is influenced by many stakeholders, including owners/shareholders, creditors, managers, employees, suppliers, customers, local residents, and the government. Different economies have systems of corporate governance that differ in how the stakeholders influence the management. The purpose of this paper is to characterize the system of Japanese corporate governance by examining each aspect of the system and to examine its benefits and costs. The paper primarily summarizes what we currently know from the past research about the system of Japanese corporate governance rather than trying to