Do Japanese CEOs matter?
In a country where individualism is emphasized less than in Western countries, we ask whether the CEO (shacho) of a Japanese corporation positively affects firm performance. To answer this question, we construct a shacho-firm matched panel data set in the period 1990 through 2002 of all listed 1419 Japanese manufacturing firms and their 3520 shachos. Though we find a positive abnormal stock return on the date a shacho change is announced, especially when the shacho change is non-routine, we document that this effect is short-lived. There seems to be no long-run positive change in performance or policies after a shacho change, even when the shacho change is non-routine. Finally, in trying to explain firm performance or policies, we attempt to separate a firm-fixed effect from a shacho-fixed effect, and are unable to disentangle a shacho-fixed effect. We are thus left to conclude that shachos do not positively matter in the Japanese corporation in this decade of a stagnant economy.
Year of publication: |
2009
|
---|---|
Authors: | Ahn, Sanghoon ; Bhattacharya, Utpal ; Jung, Taehun ; Nam, Giseok |
Published in: |
Pacific-Basin Finance Journal. - Elsevier, ISSN 0927-538X. - Vol. 17.2009, 5, p. 628-650
|
Publisher: |
Elsevier |
Keywords: | Corporate governance CEO turnover Japanese firms |
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