Does Economic Environment Affect Ownership-performance Relation?
This paper examines the effect of the changing economic environment on the relationship between ownership structure and corporate performance by comparing 1984 and 2004 samples of Japanese manufacturing firms. The 1984 evidence shows that in a tightly regulated environment, ownership has little effect on performance. However, the 2004 result presents that in an increasingly market-oriented environment, the overall ownership concentration, as well as certain types of shareholders, is significantly correlated with performance. The contrasting findings suggest that the ownership-performance relation has been influenced by the transformation of corporate governance environment caused by the financial deregulation in Japan over the past two decades.
