The Unwinding of Cross-Shareholding in Japan: Causes, Effects, and Implications 1

Hideaki Miyajima, Fumiaki Kuroki*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter

60 Citations (Scopus)


As the ownership structure of Japanese corporations has changed dramatically during the 1990s, this chapter examines the causes and consequences of the decline in cross-shareholding. Using detailed and comprehensive data on ownership structure, including data on individual cross-shareholding relationships and other variables (Tobin's q) developed by the Nissai Life Insurance Research Institute and Waseda University, the chapter highlights the determinants of the choice between holding or selling shares for both banks and firms. Profitable firms with easy access to capital markets and a high level of foreign ownership prior to the banking crisis tended to unwind cross-shareholdings, while low-profit firms which had difficulty accessing capital markets and low foreign ownership tended to keep cross-shareholding with banks. High institutional shareholding and, surprisingly, block shareholding have had positive effects on firms' performance, while bank ownership has had consistently negative effects on firm performance. The result has been a growing diversity of ownership patterns among Japanese firms.

Original languageEnglish
Title of host publicationCorporate Governance in Japan
Subtitle of host publicationInstitutional Change and Organizational Diversity
PublisherOxford University Press
ISBN (Electronic)9780191713705
ISBN (Print)9780199284511
Publication statusPublished - 2007 Sept 1
Externally publishedYes


  • Corporate governance
  • Cross-shareholding
  • Japanese economy
  • Keiretsu
  • Main bank
  • Networks
  • Stock market valuation

ASJC Scopus subject areas

  • General Economics,Econometrics and Finance


Dive into the research topics of 'The Unwinding of Cross-Shareholding in Japan: Causes, Effects, and Implications 1'. Together they form a unique fingerprint.

Cite this