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Title
Japanese:Corporate Governance, Employment, and Financial Performance of Japanese firms: A cross-country analysis 
English:Corporate Governance, Employment, and Financial Performance of Japanese firms: A Cross-Country Analysis 
Author
Japanese: 蟻川 靖浩, 井上 光太郎, 齋藤 卓爾.  
English: ARIKAWA Yasuhiro, Kotaro Inoue, Takuji Saito.  
Language English 
Journal/Book name
Japanese:RIETI Discussion Paper Series 
English:RIETI Discussion Paper Series 
Volume, Number, Page 18-E-084       
Published date Dec. 2018 
Publisher
Japanese:独立行政法人経済産業研究所 
English:Research Institute of Economy, Trade and Industry 
Conference name
Japanese: 
English: 
Conference site
Japanese: 
English: 
File
Official URL https://www.rieti.go.jp/jp/publications/summary/18120006.html
 
Abstract This study examines whether the sustained lower profitability and market valuation of Japanese firms compared to global peer firms can be explained by the structure of insider dominate board of directors and the employment system which hinders flexible employment adjustments by using cross-country data. Firstly we show that level of outside director ratio and flexibility of employment adjustment both differ consistently across 27 countries in the analyzed period. We show that these two factors significantly explain observed variation of financial performance across countries significantly. In addition, we show that not only do these two factors have significant explanation power over the relatively poor performance of Japanese firms, but also over the better financial performance and growth rate of US firms.

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