Corporate governance and transparency in Japan

Aman, Hiroyuki and Beekes, Wendy and Brown, Philip (2021) Corporate governance and transparency in Japan. The International Journal of Accounting, 56 (1): 2150003. ISSN 0020-7063

Text (ABB_20200805)
ABB_20200805.pdf - Accepted Version
Available under License Creative Commons Attribution-NonCommercial.
Download (331kB)

Abstract

Corporate governance (CG) reformists typically presume better-governed companies are more transparent to investors. We focus on CG and transparency in Japan, where CG has been an ongoing issue. Using local ratings of Japanese companies’ CG, and data on corporate disclosures and their associated stock returns, we do find better-governed Japanese companies have made more frequent and timelier disclosures, and that their share prices have reflected value-relevant information earlier. While these results hold for good news, they do not hold for bad. Consequently, governance guidance in Japan may not have resulted in both timelier and more balanced release of newsworthy information.