Since the mid-1990s, the shareholder composition at the Tokyo Stock Exchange has changed significantly. Whereas previously, corporations and banks were the largest shareholders – often in stable antei kabunushi or mochiai holdings – as of 2016, foreign owners (30%) and a new category called “trust banks” (20%) combine to be the largest owner group. Yet, little is known about the investment behavior of these two owner groups or their goals and preferences in terms of corporate behavior, in particular the trust banks. Are Japan’s trust banks simply a continuation of the previous, stable main bank holdings, or are they similar to foreign investors and pursue more targeted ROI strategies? If they are active new owners, what does this mean for corporate governance monitoring and the market for corporate control in Japan?
Corporate governance is a hot topic in Japan right now, but it is mostly discussed in terms of outside board members, and new rules regarding the board of directors and accounting oversight. This presentation looks at the governance function of the stock market, and in particular Japan’s emerging institutional investors. Based on a specially constructed dataset based on Nikkei Needs we analyze the investment behavior of different groups of shareholders and show that Japan’s trust banks are indeed active investors. The presentation then invites a discussion of what this means for managerial incentives and corporate strategy and profitability of listed Japanese firms.
To learn more about Ulrike Schaede, please click here.
Koichi Hama, Chair
Susanne Walloscheck, Vice-Chair
ACCJ Marketing Programs Committee
Nicholas Benes, Chair
Michael Alfant, Kumi Sato, Vice-Chairs
ACCJ Growth Strategy Task Force
Arthur Mitchell, Chair
ACCJ Japan Structural Reform Task Force
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