CORPORATE GOVERNANCE IN JAPAN: AFFILIATION, FIRM SIZE, AND THE STRUCTURE OF CORPORATE OWNERSHIP

This study examines the influence of corporate affiliation and firm size on ownership structure and lending constituents in Japan. Our findings support the notion that financial institutions concentrate their ownership positions in large companies, while the dominant ownership group of smaller companies appears to be associated larger companies. This large-small firm difference appears to be present whether the firms are affiliated formally though keiretsu membership. Our findings are consistent with the notion that corporate governance in Japan radiates from main banks to large "parent" corporations and then from these large corporations to smaller "child" corporations.