Using data spanning the 1996-1998 fiscal years of 247 of Japan's largest manufacturers, we empirically evaluate the extent to which a firm's investment behavior and financial performance is influenced by its ownership structure. To do so, we examine six distinct categories of Japanese shareholders: foreign investors, investment funds, pen sion funds, banks and insurance companies, affiliated companies and insiders. Our findings strongly indicate that the relationship between the equity stakes of a particular category of investor and a firm's financial performance and investment behavior is highly idiosyncratic. Such a result emphasizes the importance of making finely grained and contextually relevant distinctions when modeling and evaluating corporate governance relations.

Japan, corporate governance, investment behaviour, ownership, performance
Corporate Finance and Governance: Other (jel G39), Firm Objectives, Organization, and Behavior: General (jel L20), Business Administration and Business Economics; Marketing; Accounting (jel M)
Erasmus Research Institute of Management
ERIM Report Series Research in Management
Copyright 2001, E.R. Gedajlovic, T. Yoshikawa, M. Hashimoto, This report in the ERIM Report Series Research in Management is intended as a means to communicate the results of recent research to academic colleagues and other interested parties. All reports are considered as preliminary and subject to possibly major revisions. This applies equally to opinions expressed, theories developed, and data used. Therefore, comments and suggestions are welcome and should be directed to the authors.
Erasmus Research Institute of Management

Gedajlovic, E.R, Yoshikawa, T, & Hashimoto, M. (2001). Ownership Structure, Investment Behavior and Firm Performance in Japanese Manufacturing Industries (No. ERS-2001-09-STR). ERIM Report Series Research in Management. Erasmus Research Institute of Management. Retrieved from