Banks and corporate control in Japan

Article Abstract:

Japanese banks have limited incentives to promote shareholders' interests, particularly in companies outside bank groups, because they act both as creditors and shareholders. Banker appointments lead to significant downsizing in companies outside bank groups, but this is not the case with bank group firms. This seems to indicate that banks are willing to support weak bank group firms. Similarly, entertainment spending declines as cash flow reduces in companies outside bank groups, but this does not happen in bank group firms. Bankers are appointed to firms' boards following poor performance, but this seems to be mainly a response to poor current liquidity.

Banking industry, Japan, Corporate governance

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Value-Enhancing Capital Budgeting and Firm-specific Stock Return Variation

Article Abstract:

A cross-section, robust positive association is found between the magnitude of variation in stock returns that are firm-specific and a measure of corporate investment economic efficiency. This supports the hypothesis that firm-specific return variation assesses the level at which information is reflected in a firm's share prices, and that informative prices improve the efficiency of firm investment.

Management dynamics, Capital Budgeting, Methods, Models, Management, Comparative analysis, Industrial efficiency, Economic efficiency, Capital investments, Company business management, Return on investment, Stock price forecasting, Rate of return, Capital budgets, Capital investment

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Demand curves for stocks do slope down: new evidence from an index weights adjustment

Article Abstract:

Issues discussed concern the impact of index fund rebalancing on stock prices, focusing on the effect of the Toronto Stock Exchange's redefinition of the public float on stocks within the exchange. The relationship between index weights and stock prices is addressed.

Canada, Market Research, Statistical Data Included, Research, Stocks, Supply and demand, Securities, Stock price indexes, Toronto Stock Exchange

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