The Japanese Stewardship Code: Compliance and Outcomes

2017 Fiscal Year Research-status Report

• Project/Area Number: 17K04041
• Research Institution: Hitotsubashi University
• Principal Investigator: Routledge J. 一橋大学, 大学院商学研究科, 教授 (50771268)
• Project Period (FY): 2017-04-01 – 2020-03-31
• Keywords: Stewardship Code / Institutional Investors / Compliance / Monitoring

Outline of Annual Research Achievements

A thorough search of relevant literature has been conducted, and a draft literature review has been written. Data collection from archival sources is almost complete, including: (1) Stewardship Code disclosure data for 2015 to 2017 from investor companies; and (2) financial, governance and other data from investor and investee companies for empirical models. Data has been collected using grant funding for: research assistants to hand-collect Code disclosure data, purchase of data from Nikkei, and use of the Capital IQ database. Data is currently being collated ready for empirical analysis.

Current Status of Research Progress

2: Research has progressed on the whole more than it was originally planned.

Reason

Progress is consistent with the milestones outlined in the grant application research plan. In particular, the 2017 milestones of completing a literature search relevant to the topic is complete. The 2018 milestone of finalizing data collection will be reached in the next few months. Data collection is a significant component of the research project, and its anticipated completion means the empirical analysis phase of the project will commence according to the original schedule. There have been no significant unforeseen obstacles that have affected the originally planned progress.

Strategy for Future Research Activity

Data collection will be finalized in the immediate future. The next major step for the study is to develop a Code compliance disclosure quality index, using content analysis. Subsequently, empirical analysis will be commenced to test the relation between Code compliance and investee company accounting profits, market performance and quality of reported earnings. The initial focus will be to model Code compliance and earnings quality. It is anticipated that the initial results of analysis will be written-up in late 2018. Conference presentations are planned for 2019, followed by the development of papers for journal submission.

Causes of Carryover

Personnel costs(research assistant costs) were far less than anticipated, although article costs were greater than budgeted.
I will put more money toward a research assistant this year for data collection and empirical analysis.