TY - JOUR
T1 - Corporate governance, relational banking and R & D
T2 - Evidence from Japanese large firms in the 1980s and 1990s
AU - Miyajima, Hideaki
AU - Arikawa, Yasuhiro
AU - Kato, Atsushi
PY - 2002
Y1 - 2002
N2 - We investigate the effects of the Japanese corporate governance structure on corporate investments, especially R & D, dividing Japanese high R & D firms into two groups, i.e. young growing firms and old mature firms. The main bank relationship mitigates the asymmetric information problem for young growing firms' R & D expenditure in the 1990s. Portfolio investors strengthen the cash constraints on R & D, while stable shareholders offset the myopic pressure by portfolio investors. We also show some evidence that stable shareholders induced old mature firms to overinvest during the bubble economy period.
AB - We investigate the effects of the Japanese corporate governance structure on corporate investments, especially R & D, dividing Japanese high R & D firms into two groups, i.e. young growing firms and old mature firms. The main bank relationship mitigates the asymmetric information problem for young growing firms' R & D expenditure in the 1990s. Portfolio investors strengthen the cash constraints on R & D, while stable shareholders offset the myopic pressure by portfolio investors. We also show some evidence that stable shareholders induced old mature firms to overinvest during the bubble economy period.
KW - Asymmetric information
KW - Free cash flow
KW - J-type corporate governance structure
KW - Managerial myopia
KW - R & D
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U2 - 10.1504/ijtm.2002.003037
DO - 10.1504/ijtm.2002.003037
M3 - Article
AN - SCOPUS:0036085050
SN - 0267-5730
VL - 23
SP - 769
EP - 787
JO - International Journal of Technology Management
JF - International Journal of Technology Management
IS - 7-8
ER -