Banks, Ownership Structure, and Firm Value in Japan

Adoption and policy implications of Japan’s new corporate governance practices after the reform

“…See also Chen & Young (2010) for the infringements of minority shareholder rights in recent Chinese M&A. 35 For example, Morck and Nakamura (1999) and Morck, Nakamura, and Shivdasani (2000). 36 On balance, our empirical evidence seems to suggest somewhat less optimistic prospects for the value of transparency Japanese firms place than our theory implies.…”

On the effects of banks’ equity ownership on credit markets

“…20 Similar numbers apply to Japan as well. For example Morck et al (2000) show that in 1986 banks owned 13% of the shares listed on the First Section of the Tokyo Stock Exchange.…”

“…As mentioned in the introduction, several papers have directly analyzed the effect of aggregated bank ownership on interest rates. Using data from Japan and Germany, Schmid (1996), Weinstein and Yafeh (1998) and Morck et al (2000) observe an inverse U-shaped or increasing relation between bank equity participation and interest rates for German and Japanese firms. These results are consistent with the reduction in competitiveness identified in this paper if we make the additional assumption that high interest rates lead to deadweight costs.…”

“…For example Schmid (1996); Weinstein and Yafeh (1998) and Morck et al (2000) observe an inverse U-shaped or increasing relation between bank equity participation and interest rates for German and Japanese firms, where banks constitute important block holders in firms.…”

The effects of ownership concentration and corporate debt on corporate divestitures in Chinese listed firms

“…When a major creditor also owns a large stake in the debtor company, the incentive to expropriate from the minority shareholder is even greater (Morck, Nakamura, & Shivdasani, 2000). In China, when the debtor company is also controlled by the state, the creditor and the controlling shareholder of the debtor, both being state enterprises or agencies, share a common goal, namely to protect the interests of the state regardless of potentially negative consequences on the wealth of the average shareholder.…”