Background:
Let us understand about Japan's corporate governance system known as a keiretsu which dates back to the 1600s, but was then propelled by the Japanese government's newly formed Meiji Restoration in 1866 as the world entered the industrial revolution.
Keiretsu has popularly two models namely: Modern Horizontal Keiretsus
Here the purpose of the model is strictly distribution of goods around the globe. It may seek new markets for keiretsu companies, help incorporate keiretsu companies to other nations and sign contracts with different companies around the world to supply commodities used for Japanese industry.
Modern Vertical Keiretsus
Vertical keiretsus are referred to as the group of companies within the horizontal keiretsu such …show more content…
In General, the financial system of a country is not only a reflection the demand and supply situation but also of social, cultural and historical factors. In the case of Japan we can notice there is, heavy reliance on debt financing, rather than equity financing, is characterized by heavy bank-borrowing under the so-called “main bank” system, a form of close and continuous bank-firm relationship.
If we look at equity financing, a unique feature is that new shares are not often sold into the market to be held by those in the household sector (individuals), but rather they are allocated to financial institutions or non-financial firms, or they are mutually held in the form of “cross shareholdings” among allied companies. These features have made Japanese corporate governance rather unique when compared with the Anglo-American style of …show more content…
Of these, the four factors where I see that Japanese Investors can play a more important role and follow are the ones that have already had an effect and are particularly important in formulating any forecast regarding the future financial system of the country. They are: (1) The changing patterns of corporate finance, (2) The dissolution of cross shareholding, (3) The increasing role of domestic investors, and (4) The effects of innovations in information and communication technology (ICT). Here we will focus on the 3rd point which is the increasing role of Domestic Investors which are the Japanese investors in this case:
As we discuss the prospect of Japanese corporate governance, we at no cost can dismiss the possibility of the increased role of domestic investors. In Japan their growth has remained moderate, even though some improvements have been made in the legal framework (regarding securities investment trusts) under which the investors operate, and deregulation has taken place (such as allowing banks to sell investment trusts at their
Let us understand about Japan's corporate governance system known as a keiretsu which dates back to the 1600s, but was then propelled by the Japanese government's newly formed Meiji Restoration in 1866 as the world entered the industrial revolution.
Keiretsu has popularly two models namely: Modern Horizontal Keiretsus
Here the purpose of the model is strictly distribution of goods around the globe. It may seek new markets for keiretsu companies, help incorporate keiretsu companies to other nations and sign contracts with different companies around the world to supply commodities used for Japanese industry.
Modern Vertical Keiretsus
Vertical keiretsus are referred to as the group of companies within the horizontal keiretsu such …show more content…
In General, the financial system of a country is not only a reflection the demand and supply situation but also of social, cultural and historical factors. In the case of Japan we can notice there is, heavy reliance on debt financing, rather than equity financing, is characterized by heavy bank-borrowing under the so-called “main bank” system, a form of close and continuous bank-firm relationship.
If we look at equity financing, a unique feature is that new shares are not often sold into the market to be held by those in the household sector (individuals), but rather they are allocated to financial institutions or non-financial firms, or they are mutually held in the form of “cross shareholdings” among allied companies. These features have made Japanese corporate governance rather unique when compared with the Anglo-American style of …show more content…
Of these, the four factors where I see that Japanese Investors can play a more important role and follow are the ones that have already had an effect and are particularly important in formulating any forecast regarding the future financial system of the country. They are: (1) The changing patterns of corporate finance, (2) The dissolution of cross shareholding, (3) The increasing role of domestic investors, and (4) The effects of innovations in information and communication technology (ICT). Here we will focus on the 3rd point which is the increasing role of Domestic Investors which are the Japanese investors in this case:
As we discuss the prospect of Japanese corporate governance, we at no cost can dismiss the possibility of the increased role of domestic investors. In Japan their growth has remained moderate, even though some improvements have been made in the legal framework (regarding securities investment trusts) under which the investors operate, and deregulation has taken place (such as allowing banks to sell investment trusts at their