Does the Japanese Governance System Enhance Shareholder Wealth? Evidence from the Stock-Price Effects of Top Management Turnover
- 1 October 1996
- journal article
- Published by Oxford University Press (OUP) in The Review of Financial Studies
- Vol. 9 (4) , 1061-1095
- https://doi.org/10.1093/rfs/9.4.1061
Abstract
This article examines the stock-price effects of top management turnover announcements for 432 Japanese corporations from 1985 to 1990. We find that these announcements are associated with significantly positive abnormal returns. The returns are greater when turnover is forced than when turnover represents normal succession. The stock-price effects are also significantly positive when turnover is forced and the successor is appointed from outside the firm. We find that large shareholders play an important role during outside succession. This evidence suggests that the disciplinary decisions of Japanese governance mechanisms are consistent with shareholder wealth maximization.Keywords
This publication has 29 references indexed in Scilit:
- The Japanese Main Bank System: An Introductory OverviewPublished by Oxford University Press (OUP) ,1995
- Managerial performance, boards of directors and takeover biddingJournal of Corporate Finance, 1994
- Partial Anticipation, the Flow of Information and the Economic Impact of Corporate Debt SalesThe Review of Financial Studies, 1993
- Private benefits from block ownership and discounts on closed-end fundsJournal of Financial Economics, 1993
- Voting power in the proxy process: The case of antitakeover charter amendmentsJournal of Financial Economics, 1991
- Private benefits from control of public corporationsJournal of Financial Economics, 1989
- An analysis of stock price reaction to management change in distressed firmsJournal of Accounting and Economics, 1989
- The wealth effects of company initiated management changesJournal of Financial Economics, 1987
- The Structure of Corporate Ownership: Causes and ConsequencesJournal of Political Economy, 1985
- Measuring the Effects of Regulation with Stock Price DataThe RAND Journal of Economics, 1985