We investigate the effects of the Japanese corporate governance structure on corporate investments, especially R & D, dividing Japanese high R & D firms into two groups, i.e. young growing firms and old mature firms. The main bank relationship mitigates the asymmetric information problem for young growing firms' R & D expenditure in the 1990s. Portfolio investors strengthen the cash constraints on R & D, while stable shareholders offset the myopic pressure by portfolio investors. We also show some evidence that stable shareholders induced old mature firms to overinvest during the bubble economy period.
ASJC Scopus subject areas
- コンピュータ サイエンスの応用