Firms In Japan Research Articles

The effects of removing gender-based price discrimination on movie demand: Estimates using smartphone location data

Since 2021, an increasing number of movie complex firms in Japan have eliminated long-standing gender-based price discrimination by replacing discounts for only women with discounts for all customers. This study examines the impact of this discount change on movie demand. Using theater-level visit data by gender and a difference-in-differences strategy, I find increased movie demand for both males and females, indicating inter-gender interdependence of movie demand. A profit analysis shows that the average movie theater profit remains at the same level as that before the discount adjustment. Lastly, combining the difference-in-differences estimates with a random utility model reveals that joint movie consumption enhances paired customers' movie-watching utility.

A Chip War Made in Germany? US Techno‐Dependencies, China Chokepoints, and the German Semiconductor Industry

<p>As geo-economic and geopolitical rivalries intensify, the US is weaponizing its power in global semiconductor supply chains to restrict Chinese technological development. To win this chip war against China, the US must compel key foreign firms in Asia and Europe not to supply its adversary with the materials, tools, and know-how needed to make advanced semiconductors. But will these firms agree to follow the US chip embargo and avoid the lucrative Chinese market? This article examines Germany’s “China chokepoint” firms, whose identity and behavior remain critically understudied. Drawing on novel data sets and annual company reports, we show that German firms across three case studies are highly “techno-dependent” on the US. Despite this techno-dependence, German firms have so far sought to circumnavigate US export controls. This constitutes a puzzle because Germany’s semiconductor firms are no more involved in the Chinese market than are firms in Japan and South Korea—which have frequently signaled voluntary compliance or even withdrawn from China in anticipation of harsher US sanctions. To resolve this puzzle, we map out Germany’s semiconductor network and demonstrate that it is tightly articulated with Germany’s auto industry—which is in turn heavily exposed to Chinese markets. We propose that this secondary exposure, through firms’ embeddedness in Germany’s “national production regime,” encourages them to resist the US chip embargo. In this way, we contribute empirical and conceptual insights to international political economy scholarship on firms as geo-economic actors, actively engaged in a protracted and contentious policy process with US authorities.</p>

Supplier–buyer (in)congruence in environmental management accounting for sustainable development in the context of Japan

AbstractThis study provides a comprehensive perspective on the integration of Environmental Management Accounting (EMA) in translating environmental management strategies into corporate outcomes, both at the firm and supply chain levels. Grounded in legitimacy theory and agency theory, we introduce a conceptual framework to comprehensively investigate the impact of EMA implementation on corporate environmental performance (CEP) and corporate financial performance (CFP). Additionally, by considering the dynamics of supplier–buyer relationships, this research delves into the influence of supplier–buyer alignment in EMA on corporate performance, encompassing CEP and CFP within a supply network. To collect empirical data, we partnered with two prominent information firms in Japan, Toyo Keizai Inc. and., Nikkei Inc and gathered EMA data from chief financial officers of publicly listed companies spanning multiple industries in Japan. We manually paired these public firms with their business partners, including industry buyers and suppliers, to establish focal firm‐business partner pairs. Our findings indicate a positive correlation between the extent of EMA implementation and both CEP and CFP. Furthermore, we observe that board gender diversity enhances the relationship between EMA implementation and CFP, while it exerts no influence on the connection between EMA implementation and CEP. Lastly, our study reveals that supplier–buyer congruence in EMA implementation yields positive effects on the performance of focal firms operating within a supply chain network.

The role of Japanese corporate governance features in explaining rating differences between global and Japanese rating agencies

Many Japanese bond issuers believe that global credit rating agencies (CRAs)—Moody's and S&P—do not consider the unique corporate governance structure in Japan and assign lower credit ratings even though the “main bank” relationship in Japan can significantly reduce the default risk of these companies. Using 5,814 rated corporate bonds issued by 558 non-financial firms in Japan from 2003 to 2021, we find that local CRAs (R&I and JCR) weigh unique Japanese corporate governance features more heavily and assign higher ratings to Japanese corporate bonds relative to global CRAs. Our results further suggest that the degree of rating differences between local and global CRAs for individual issuers results from systematically different assessments of company-specific risk by these CRAs. Our data also reveal that the importance of main bank ties in Japanese corporate governance remains intact in more recent years, contrary to previous findings.

Spatial Constraints on Economic Interactions: A Complexity Approach to the Japanese Inter-Firm Trade Network

The trade distance is an important constraining factor underpinning the emergence of social and economic interactions of complex systems. However, agent-based studies supported by the granular analysis of distances are limited. Here, we present a complexity method that places the actual geographical locations of individual firms in Japan at the epicentre of our research. By combining methods derived from network science together with information theory measures, and by using a comprehensive dataset of Japanese inter-firm business transactions, we evaluate the effects of spatial features on the structural patterns of the economy. We find that the normalised probability distributions of the distances between interacting firms obey a power law like decay concomitant with the sizes of firms and regions. Furthermore, small firms would reach large distances to become customers of large firms, while trading between either only small firms or only large firms tends to be at smaller distances. Furthermore, a time evolution analysis suggests a reduction in the overall average trading distances in last 20 years. Lastly, our analysis concerning the trading dynamics among prefectures indicates that the preference to trade with neighbouring prefectures tends to be more pronounced at rural regions as opposed to the larger central conurbations.

Main bank impairment and corporate cash holdings during the global financial crisis

This paper examines how the impairment of main banks’ balance sheets affects corporate cash-holding behavior during the 2008 financial crisis using a firm–bank matched panel dataset of 2,520 firms in Japan. The major findings of this paper are as follows. First, the impairment of main banks increases firms’ cash holdings during this financial crisis. Second, this tendency is more pronounced among firms with limited financing sources and those with unstable main bank relationships. Third, holding large amounts of cash increases the value of firms with main bank impairment during the 2008 financial crisis.

Empirical study on voting results and proxy advisor recommendations in Japan

This study examines the relationship between proxy advisory firms’ recommendations and investors’ voting behavior in Japan, where corporate governance has been under transition. Based on 1,025 shareholder meeting proposals and recommendations by proxy advisory firms in Japan between March 2010 and March 2022, multivariate regression analyses reveal that the dissenting recommendations of the two main proxy advisory firms are negatively correlated with the approval rate of proposals, as well as the percentage of affirmative votes cast by institutional investors. Furthermore, the institutional investors’ behavior is more consistent with the recommendations of proxy advisory firms than that of other investors.

Integration of B-to-B trade network models of structural evolution and monetary flows reproducing all major empirical laws

We develop a single two-layered model framework that captures and replicates both the statistical properties of the network as well as those of the intrinsic quantities of the agents. Our model framework consists of two distinct yet connected elements that were previously only studied in isolation, namely methods related to temporal network structures and those associated with money transport flows. Within this context, the network structure emerges from the first layer and its topological structure is transferred to the second layer associated with the money transactions. In this manner, we can explain how the micro-level dynamics of the agents within the network lead to the exogenous manifestation of the aggregated system statistical data en-wrapping the very same agents within the system. This is done by capturing the essential dynamics of collective motion in complex networks that enable the simultaneous emergence of tent-shaped distributions in growth rates within the agents, together with the emergence of scaling properties within the network in the study. We can validate the model framework and dynamics by applying these to the context of the real-world inter-firm trading network of firms in Japan and comparing the results of the statistical distributions at both network and agent levels in a temporal manner. In particular, we compare our results to the fundamental quantities supporting the seven empirical laws observed in data: the degree distribution, the mean degree growth rate over time, the age distribution of the firms, the preferential attachment, the sales distribution in steady states, their growth rates, their scaling relations generated by the model. We find these results to be nearly identical to the real-world data. The framework has the potential to be transformed into a forecasting tool to support decision-makers on financial and prudential policies.

The effect of voluntary international financial reporting standards adoption on information asymmetry in the stock market: Evidence from Japan

This study investigates how voluntary International Financial Reporting Standards (IFRS) adoption impacts information asymmetry in the stock market. We analyze data from firms in Japan, where local accounting standards have substantially converged with IFRS but are more rules-based than principles-based IFRS. These different implementation approaches allow us to investigate how increased accounting flexibility influences recognition and measurement practices, attenuating the effects of accounting standard differences on the level of accounting rule existence or non-existence. We find that information asymmetry increases after voluntary IFRS adoption, which is driven by small- and medium-sized IFRS adopters’ decrease in earnings quality after voluntary IFRS adoption. Additional analyses reveal that firms’ reporting incentives and accounting resources influence these changes. These results suggest that IFRS’s increased accounting flexibility in recognition and measurement practices worsens the information environments of firms with weak incentives to commit to transparent financial reporting or fewer accounting resources (i.e., small- and medium-sized firms).

Convergence Has Already Arrived? Examining the Impact of IFRS 16 Issuance on Leasing Decisions among Local-GAAP Firms in Japan

Convergence Has Already Arrived? Examining the Impact of IFRS 16 Issuance on Leasing Decisions among Local-GAAP Firms in Japan

Does ownership structure influence carbon emission? Different roles of institutional investors

This study seeks to understand the impact of different ownership structures on carbon emissions. We use data from listed firms in Japan, where the government requires firms to disclose the volume of carbon they emit. Our empirical findings are summarized as follows. First, the cross-sectional analysis reveals that firms with foreign institutional investors tend to emit less CO2. In contrast, we do not find evidence that domestic institutional investors reduce carbon emissions. The results are robust under various alternative estimations, such as firm-fixed effects, propensity score matching, and IV (instrumental variable) estimation; they are also robust when the enactment of Principal Responsible Investment (PRI) by the United Nations is included as an exogenous shock. While various studies have examined the factors affecting a firm’s carbon emissions, few studies examine the influence of its ownership structure. We focus on firm ownership structure, especially ownership by institutional investors, because of their substantial impact on managerial decision-making.

Effects of entrepreneurial heterogeneity within necessity- and opportunity-based entrepreneurs on business performance

This paper examines whether and how heterogeneity within necessity- and opportunity-based entrepreneur groups affects business performance using a survey of 21,532 new firms in Japan. The major findings are as follows. First, business performance is not homogeneous among either necessity- or opportunity-based entrepreneurs. Second, the existing theory that necessity-based entrepreneurs tend to show poorer performance than opportunity-based entrepreneurs does not necessarily hold when considering heterogeneity within the groups. Specifically, among some types of necessity- and opportunity-based entrepreneurs, necessity-based entrepreneurs can even exhibit better performance than opportunity-based entrepreneurs.

Small and medium-sized taxi firm operators' stated choices of future business models: A case study in Japan based on hybrid choice model with panel effects

Taxi firms in Japan faced various challenges, including long-standing issues such as dwindling demand and driver shortages, recent competition from new technologies, and the short-term impact of the COVID-19 outbreak. These pressures necessitate a diversification of their business model, yet it remains uncertain how operators plan to adapt and how the government can facilitate the evolution of their mobility services. This study explores these issues from the viewpoint of small and medium-sized taxi firm operators in Japan, specifically focusing on their attitudes towards potential barriers, their preparedness for, and preferences towards new business models. To that end, we conducted a Statd Preference survey on new business models with taxi companies in the Chugoku region, western Japan. The findings reveal that an operator's attitude towards regulatory strictness indirectly lowers the likelihood of choosing new business models, whereas operational difficulties increase this probability. Interestingly, taxi firms operating in medium-sized cities tended to collaborate with private or public sectors in their new business models compared to firms in other areas. This study offers insights into policy discourse and design, emphasizing the need for strategic, collaborative, and contextually-aware responses to the evolving challenges within Japan's taxi industry.

Employee Engagement and Organizational Culture in Automotive Firms in Japan

Employee Engagement and Organizational Culture in Automotive Firms in Japan

Influence of Grand Strategies on Performance of Manufacturing Firms in Nairobi County, Kenya

Relationship between grand strategies and performance of manufacturing firms has gained credence globally. Manufacturing firms in Japan have recorded greater success in manufacturing sector globally due to their ability to adopt various grand strategies that have aided them to achieve sustained competitive advantage. However, manufacturing industry in Kenya has experienced decline over the last five years. Manufacturing sector GDP contribution in Kenya has reduced in 2022 first quarter to KES 118,134 from KES 113,460 million 2022 second quarter. Therefore, this study sought to examine the influence of grand strategies on performance of manufacturing firms in Nairobi County, Kenya. The specific objectives were to examine the influence of product development strategy on performance of manufacturing firms and to establish the influence of turnaround strategy on performance of manufacturing firms in Nairobi County, Kenya. The study was guided by Igor Ansoff’s theory, and Stage theory of successful turnaround. Descriptive research design was used in this study. One hundred (100) respondents from 20 large manufacturing firms in Nairobi County were targeted. The sampling frame comprised of marketing/sales managers, finance managers, human resource managers, operational managers, Strategy & Business Development Managers. The study sampled 100 using census sampling technique. Primary data was collected using a well-designed questionnaire. Quantitative data was analyzed using descriptive and inferential statistics. Descriptive analysis was summarized data in form of central tendency as well as dispersion and inferential analysis was used to test hypothesis at a significance level of 0.05. Descriptive analysis included; frequencies, Mean, Standard deviation and percentage while inferential analysis involved correlation analysis and multiple linear regression analysis. Prior to conducting multiple linear regressions, the study ensured that the assumptions of linear regression are met. The data was presented in form of tables and models. The results indicated that product development strategy had positive and significant effect on organizational performance. Turnaround strategy had a positive and significant effect on performance. On the other hand, the regression analysis revealed that the grand strategies explained up to 64.5% change in organizational performance of manufacturing firms in Nairobi County. The study concluded that grand strategies significantly influence organizational performance of manufacturing firms in Nairobi County. This study recommends that management of manufacturing firms pursuing product development strategies so as to come up with products that meet the changing needs of their customers. It is recommended that the companies should open new branches in new geographical areas to reach new customers not only beyond Nairobi County, but also beyond East Africa. The companies can expand their product lines by developing new products that may or may not be related to the current products to target current customers. The study recommends that management of manufacturing firms should create an organizational culture that is in line with their turnaround strategy. Keywords: [Organizational Performance, Product Development Strategy, Turnaround Strategy]

Former CEO advisors and firm performance

Using unique data on former CEOs taking advisory positions in their former firms in Japan, we investigate the determinants of advisor selection and how this impacts firm performance. We found that retiring CEOs with higher accounting performance and more co-opted boards are more likely to serve in advisory positions than those with lower accounting performance and fewer co-opted boards. Additionally, firms with their own former CEOs as advisors tend to perform worse than those without such advisors. Finally, we found that firms with former CEO advisors have lower turnover performance sensitivity toward successor CEOs than those without. These results imply that influential CEOs may become advisors and be involved in successor management even after retirement, which may not be beneficial to shareholders.

Start-up firms' investments: when economic policy uncertainty matters?

PurposeThis study examines the impact of economic policy uncertainty (EPU) on investment decision-making of start-up firms in Japan. While existing literature suggests firms generally retrench investment under EPU, the authors argue that start-ups’ investment behaviours are likely different given the fact that start-ups always have to compete for survival.Design/methodology/approachThe authors investigate the impact of general economic policy and policy-specific uncertainty, including monetary policy, fiscal policy, trade policy and exchange rate policy uncertainty, on corporate investment of start-up firms using multiple fixed-effect regression. A wide range of robustness and endogeneity tests are conducted to ensure the validity and soundness of the empirical findings.FindingsThe authors document a positive effect of EPU on start-up investment, to suggesting that the investment behaviour of start-ups is backed by venture capital distinct from that of mature firms. The results show that start-ups are more vulnerable during the changes in trade and exchange rate policies; uncertainties in monetary and fiscal policies do not restrain firms' investment. However, the effect varies in the cross-sections. Financial constraints have a moderating effect on the relation-ship between EPU on start-up investment. Institutional investors have an incremental effect on the positive relationship between EPU and start-up investment by encouraging risky investments.Originality/valueThis is the first study to investigate how start-up investment is influenced by EPU, thus providing a new understanding of the investment behaviour of start-up firms during uncertainty. Further investigation sheds light on the roles of institutional and managerial ownership in this newfound relationship.

What hinders digital communication? Evidence from foreign firms in Japan

Digital technology such as virtual meetings is key to communication and collaboration. However, a firm-level survey in Japan during the COVID-19 pandemic shows that foreign firms regarded digital communication as a key business obstacle. This paper estimates the determinants of the likelihood that foreign firms regard digital communication as an obstacle. The results show that digital communication is hindered by language differences, employees’ nationality differences, employment size, and time differences from foreign headquarters. Contrary to common assertions, digital communication is regarded as an obstacle in remote-work feasible sectors, but not so in in-person service sectors. Thus, digital communication does not completely eliminate barriers to face-to-face communication.

Supply-chain simulations for shaping lockdown policies

ABSTRACT To prevent the spread of COVID-19, many governments have imposed lockdowns. This practice has resulted in economic stagnation across broad areas because of the shock of the lockdown propagated to other regions through supply chains. Using supply-chain data for 1.6 million firms in Japan, this study examines how the economic effects of lockdowns in multiple regions interact with each other. Our major findings are twofold. First, when multiple regions coordinate the timing of their lockdowns, their economic losses are smaller than when they do so asynchronously. Second, the benefit of synchronous lockdown in multiple regions is larger when they are connected through a larger number of supply-chain links. Our results suggest a need for policy coordination across regions and countries when lockdowns are imposed.

The Impact of Shareholder Activism on the Long-Term Performance of Firms in Japan

The Impact of Shareholder Activism on the Long-Term Performance of Firms in Japan