TY - JOUR
T1 - Does corporate board downsizing increase shareholder value? Evidence from Japan
AU - Uchida, Konari
N1 - Funding Information:
An earlier version of this paper was presented to the Japanese Association of Applied Economics, the Japan Association of Private Law, the Japan Society of Business Administration, and finance seminars held at Kyushu University, Nanzan University, Seinan Gakuin University, and the University of Tokyo. I thank Yasuhiro Arikawa, Carl R. Chen (editor), Naohisa Goto, Sumio Hirose, Hirotsugu Iijima, Kotaro Inoue, Hatsuru Morita, Daisuke Nogata, Wataru Tanaka, Peng Xu, and an anonymous referee for their helpful comments and suggestions. This research was financially supported by the JSPS Grants-in-Aid for Scientific Research and by the Yu-cho Foundation.
Copyright:
Copyright 2011 Elsevier B.V., All rights reserved.
PY - 2011/10
Y1 - 2011/10
N2 - Japanese firms that have traditionally had large boards have recently become subject to pressures for small boards. This study shows that Japanese firms that substantially decreased board size tended to adopt an officer system and so did not substantially decrease the size of the management team (executive officers and directors). This tendency is especially evident for high-performing firms that face less information asymmetry. Japanese firms endogenously choose the change in the management team size when downsizing their boards. Firms that downsize boards do not show performance improvements, suggesting that board downsizing does not necessarily raise shareholder value.
AB - Japanese firms that have traditionally had large boards have recently become subject to pressures for small boards. This study shows that Japanese firms that substantially decreased board size tended to adopt an officer system and so did not substantially decrease the size of the management team (executive officers and directors). This tendency is especially evident for high-performing firms that face less information asymmetry. Japanese firms endogenously choose the change in the management team size when downsizing their boards. Firms that downsize boards do not show performance improvements, suggesting that board downsizing does not necessarily raise shareholder value.
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U2 - 10.1016/j.iref.2010.10.003
DO - 10.1016/j.iref.2010.10.003
M3 - Article
AN - SCOPUS:79957553950
SN - 1059-0560
VL - 20
SP - 562
EP - 573
JO - International Review of Economics and Finance
JF - International Review of Economics and Finance
IS - 4
ER -