Abstract:
Top managers in large Japanese firms are considered to focus on the interests of stakeholders rather than on those of shareholders. We examine employment reduction and dividend cut behaviour and find a significant shift in firm behaviour. Since 2000, firms have been more likely to reduce employees and less likely to reduce dividends. We also examine the effect of corporate governance on firms’ choice. Firms that have conducted director reforms tend to reduce employment and have a low likelihood of reducing their dividend. These results are consistent with the assertion that firms have moved toward emphasizing shareholders’ interests.
See full poster details here
