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Title: The interplay between global finance and Japanese firms
Author: Saito, Yukie
ISNI:       0000 0004 6421 5377
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2016
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This thesis explores the interplay between global finance and remote firms and institutions. It highlights the interactions between global institutional investors and Japanese firms on environmental, social, and corporate governance (ESG) standards, and the process of change in Japanese corporate governance practices. It focuses on analysing the responses of large Japanese firms with a high level of foreign ownership to global finance and global institutional investors' strategies for engagement. Japan provides an excellent research environment for the topic. It is geographically and culturally remote from the West, and has the world's third largest economy with increasing foreign ownership on the Tokyo Stock Exchange. Under the influence of global finance, the Japanese economy has been in transition despite the persistence of its traditional institutions. There are many globally recognised Japanese firms, although certain firms have come under scrutiny in several recent corporate governance scandals. Recently, corporate reform has become one of the priority policy agendas, which has led to incremental convergence to global standards. The aims of this thesis are as follows: (i) to analyse the evolution of shareholder activism and corporate governance practices in ownership structure change (Chapter 3); (ii) to examine how global institutional investors privately engage with remote firms (Chapter 4); (iii) to explore the power of global investors in an industry with lower foreign ownership (Chapter 5); (iv) to analyse the perceptions of local firms towards global ESG standards under policy change (Chapter 6). The thesis revealed the following findings. First, global investors provide one of the only opportunities for ESG-related dialogues for local firms, in a country where local institutional investors are not active shareholders. Global finance has the power to transform local corporate governance practices by breaking down path dependence and institutional complementarities, although the status quo does persist. Second, local firms' norms and perceptions based on the existing institutions are culturally derived informal constraints, which slow down the change of corporate governance practices even after instrumental change. Third, the target firms of engagement activities are home-biased and limited to a small number of large global brand firms; hence, non-target firms and industries maintain their ESG standards unless policy reform occurs. Finally, local firms' unfamiliarity with engagement activities limits the power of global finance in a remote market. There is a gap between global institutional investors' motivation for engagement and Japanese firms' readiness to respond; hence, considered strategies and modes of communication are critical for effective engagement with remote firms, especially when language and organisational issues are present.
Supervisor: Clark, Gordon L. Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Corporate governance ; International finance ; Japan--Economic policy--1989-