Internationalization of Corporate Governance in Japan

This thesis investigates the impact of internationalization on corporate governance in Japan. As a consequence of increasingly global competition, different systems of corporate governance come into direct contact with each other. The Japanese economy has become more international over the last two decades, and it is therefore interesting to see whether internationalization has an impact on corporate governance of Japanese companies. Using OLS regressions on a sample of 236 companies listed on the Tokyo Stock Exchange First Section, we test whether internationalization in the form of foreign presence and foreign ownership are related to board size and composition in Japanese companies. We find that foreign presence and foreign ownership are positively related to the adoption of Anglo-American board practices, i.e. smaller boards with a higher ratio of outside directors.


1. Introduction
1.1. Delimitation
1.2. Outline
2. Background
2.1. The Traditional Japanese Corporate Governance System
2.2. The Anglo-American Corporate Governance System
2.3. Weaknesses in the Japanese Model
2.4. International Convergence of Corporate Governance
2.5. Changes in Japanese Corporate Governance
2.6. Internationalization of the Japanese Economy
3. Theory and Hypothesis Development
3.1. Foreign Presence
3.2. Foreign Ownership
4. Methodology and Data
4.1. Data
4.2. Dependent Variables
4.3. Independent Variables
4.4. Control Variables
4.5. Quality of Research Design
4.6. Descriptive Statistics
4.7. Recent Developments
5. Model Development and Results
5.1. Board Size
5.2. Percentage of Outside Directors
5.3. Outside Directors
5.4. Quality of Models
6. Analysis
7. Conclusion and Discussion
8. References
9. Appendix A
10. Appendix B
10.1. Heteroscedasticity
10.2. Normality
10.3. Multicollinearity

Author: Mikael Johansson,Kristina Sawaguchi

Source: Stockholm School of Economics

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