Abstract
This study explores the implications of control transfer and ownership structure on firm value and restructuring activities in Japan. We find that conventional banks and business group affiliations negatively impact firm value and organizational restructuring, but foreign and private individual shareholding have a positive impact on firm performance and its ability to restructure internally. Furthermore, the transfer of ownership control to market-oriented investors consistently results in greater firm value and restructuring activities that enhance economic efficiency of listed companies in Japan.
Highlights
Corporate governance is a multi-dimensional phenomenon that explains the objectivity of the corporate world
A univariate and multivariate analysis has been performed to test the hypothesis of the sensitivities of ownership structure and corporate control on firm value and organizational restructuring and to gauge the influence of ultimate ownership on the performance of listed companies in the Japanese stock market
This paper focuses on corporate governance and aims to (1) examine the effects of ownership structure and regulatory changes in governance structure on firm performance and organizational restructuring in Japan, (2) discover the effects of corporate reforms in governance structure on the relationship between firm performance and restructuring, (3) to explain how the reforms and regulatory changes have influenced firm performance and the process of restructuring in Japanese stock markets
Summary
Corporate governance is a multi-dimensional phenomenon that explains the objectivity of the corporate world. M&As), (iv) safeguard the rights of minority shareholders and (v) transparency and information disclosure in accounting, financial, and other reporting to investors These corporate reforms in the objectivity of ownership are well described in the recent empirical evidence from the Japanese financial and corporate control market. The equity market pressure and the competition in the corporate control market has enhanced the restructuring of business organization and change in ownership structure has contributed to improvise resource allocation and efficiency of firms. A univariate and multivariate analysis has been performed to test the hypothesis of the sensitivities of ownership structure and corporate control on firm value and organizational restructuring and to gauge the influence of ultimate ownership on the performance of listed companies in the Japanese stock market.
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