2021 Fiscal Year Research-status Report
Cash holding and acquisition performance of public and private Japanese corporations
| Project/Area Number |
21K01570
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| Research Institution | Waseda University |
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Principal Investigator |
グエン・ティ・フォン タン 早稲田大学, 産業経営研究所, その他(招聘研究員) (60791928)
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| Co-Investigator(Kenkyū-buntansha) |
NGUYEN GIANG 早稲田大学, 政治経済学術院, 講師(任期付) (70835462)
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| Project Period (FY) |
2021-04-01 – 2025-03-31
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| Keywords | Cash holding / Firm performance / Corporate governance / Japan / Public firms / Private firms |
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| Outline of Annual Research Achievements |
Our research aims to investigate the differences between public and private firms in Japan, with a focus on corporate cash holdings and acquisition performance. We are motivated to understand the fundamental reasons behind the high levels of corporate cash holdings in Japanese firms. These results will help to deepen understanding of Japanese firms and hence act as meaningful references to investors, corporate executives, and policymakers adjusting cash holding policies. Our initial results show a consistent, significant, and widening difference between cash holding levels by public and private firms, with public firms holding more cash than private firms. From 2014 to 2019, the difference in mean cash holdings scaled by total assets between public firms and private firms increased from 3% (private: 17.2%; public: 20.5%) in 2014 to 5% (private: 18.7%; public: 24.0%) in 2019.
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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 research is being carried out smoothly. We have collected a large dataset of non-financial private and public firms from 2011 to 2019 from
Capital IQ, Nikkei NEEDS Corporate Governance Evaluate System and Corporate Financial Databank. We also obtained the stock price of public firms from Astra Manager to help us evaluate the investment performances of public firms. Regarding main analyses, we have used multivariate regressions, difference-in-difference analysis (DID), IV-2SLS, and propensity score matching to analyze the effect of public status on cash holdings and acquisition performance. We are submitting the written manuscript to international workshops and conferences in order to receive the comments from discussants and conference reviewers.
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| Strategy for Future Research Activity |
Our plans for this year include:
1/ Present results at workshops and conferences. Our target conferences include
the 8th annual conference of the International Corporate Governance Society and the UEH International Conference on Business and Finance 2022. 2/Revise the manuscript based on responses from conference referees and participants. 3/ Finalize the manuscript and submit to targeted journal.
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| Causes of Carryover |
We plan to spend for the fees relating to the presentations at international workshops and conferences, paying the salary to research assistants, paying the English proofreading and editing fee and journal submission fee.
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Research Products
(1 results)
