2018 Fiscal Year Annual Research Report
Governance and Performance of Family Firms and Non-family Firms in Japan: A Comparative Study
| Project/Area Number |
18H00901
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| Research Institution | Kwansei Gakuin University |
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Principal Investigator |
児島 幸治 関西学院大学, 国際学部, 教授 (80388727)
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| Co-Investigator(Kenkyū-buntansha) |
忽那 憲治 神戸大学, 科学技術イノベーション研究科, 教授 (00275273)
菅原 智 関西学院大学, 商学部, 教授 (40331839)
ADHIKARY B.K. 同志社大学, ビジネス研究科, 准教授 (40512976)
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| Project Period (FY) |
2018-04-01 – 2021-03-31
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| Keywords | family firms / agency problems / corporate governance / performance / Firm value |
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| Outline of Annual Research Achievements |
The grant-in-aid research was aimed at investigating and comparing the link between governance elements and performance of family and non-family firms in Japan. Meanwhile, according to the proposed plan, we have created a database of family and non-family firms in Japan. We have visited some family firms in Japan and Bangladesh and prepared two academic papers based on our collected data. We have presented a paper in Asia Academic of Management (AAOM) in June 2019 at Bali, Indonesia. We have also interviewed an officer from Fitch Ratings in Indonesia. In addition, we visited some universities in Japan, such as Tsukuba University, Gakushuin University and in Bangladesh, such as Dhaka University and the University of Liberal Arts, and shared our critical findings with them. We have submitted one of our papers to the Journal of Accounting in Emerging Economies. We have already received reviewers' comments on the paper. The paper is now on the second stage for review and publication. We have finalized writing another academic paper and planning to submit it to the Journal of Risk and Financial Management or equivalent before the end of summer. Therefore, the main research achievements so far are as follows:
1.We finalized the database of family and non-family firms in Japan, 2.Understood the problems and challenges of family firms in Japan and an emerging economy by visiting some family firms, 3.Shared our primary research results with some universities in Japan and Bangladesh, 4.Prepared two academic papers, and 5.Attended an academic conference in Indonesia.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
The main findings of our analyses are as follows:
1. We reaffirmed that the family firms in Japan tend to outperform the non-family counterparts in terms of performance measure such as Tobin's Q. We also confirmed that in the governance mainsprings, the ownership structure and board structure do have an influence on the firm's performance, and ownership structure seems to have more significant impacts than the latter.
2. We also found that the CEO-Chairman family connection has a significant negative influence on firm performance, as measured by return on assets (ROA). This relationship holds even after controlling governance elements such as board independence, board ownership, institutional ownership, and audit quality.
Therefore, we will continue to analyze these issues and summrize them. Specifically, we run statistical analyses on the following variables such as Performance characteristics variables as dependent variable (Return on Assets and Tobin's Q), Firm-specific characteristics variables as independent variable (Firm's size, Firm's age, Cash flow over operating revenue, and Debt to Equity ratio), Ownership characteristics variables such as Family ownership, Institutional ownership, Foreign ownership and Government ownership, and Board characteristics variables such as Board size, Number of board meeting, Percentage of independent director, and Percentage of non-executive directors on board.
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| Strategy for Future Research Activity |
We will continue to analyze the dataset and plan to compile the findings in at least two research papers titled: (1) Corporate governance and firm performance: A comparative analysis between listed family and non-family firms in Japan, and (2)Does CEO-Chairman Family Relationship Matter in Firm Performance? Further Evidence Using the Board Independence as Moderator.
As the COVID-19 related restrictions will certainly affect our research project in number of ways, we will probably need to figure out how to conduct filed visits, conference presentations, and to wrap up the project.
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Research Products
(3 results)
