Newly Adopted Corporate Governance Mechanism Impact on the Performance of Public Japanese Overseas Acquirers

This paper investigates relationships between two main corporate governance components namely the AntiTakeover Provisions (ATPs) as external component and Ownership Concentration as internal component and the short/long term performance of the Nikkei-listed Japanese cross-border acquirers during the last decade specifically from 2004 to the end of 2013. Market based cumulative abnormal returns (CARs) are used to represent the short term performance. The accounting based metric Return on Assets (ROA) is used to represent long term performance. Based on 222 events, a quantitative methods of events study and regression analysis were employed to reveal the relationships. The study found a negative, weak and statistically not significant relationship between the ATPs and short/long term performance. The other finding is that the relationship between ownership concentration and short/long term performance is almost negligible. These findings imply that the newly adopted corporate governance mechanism in Japan is still not as effective as in other developed markets such as USA and might need more time to reap tangible results