Foreign ownership and firm performance: Evidence from Japan's electronics industry

Nakano, M; Nguyen, P

Foreign ownership and firm performance: Evidence from Japan's electronics industry

Nakano, M Nguyen, P

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Publication Type:: Journal Article
Citation:: Applied Financial Economics, 2013, 23 (1), pp. 41 - 50
Issue Date:: 2013-01-01

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Field	Value	Language
dc.contributor.author	Nakano, M	en_US
dc.contributor.author	Nguyen, P	en_US
dc.date.issued	2013-01-01	en_US
dc.identifier.citation	Applied Financial Economics, 2013, 23 (1), pp. 41 - 50	en_US
dc.identifier.issn	0960-3107	en_US
dc.identifier.uri	http://hdl.handle.net/10453/23444
dc.description.abstract	Foreign investors have in recent years increased their ownership of Japanese firms. Has this greater involvement contributed to improve firm performance? We show that the answer depends on the assumptions regarding the unobservable firm effects. If the latter are assumed to be time invariant, as in most existing studies, the influence of foreign investors appears to be positive. However, unobserved firm characteristics are unlikely to be constant in the case of electronics firms. Using dynamic panel data estimation, we show that the effect of foreign ownership on operating profits has been initially insignificant, but is starting to show up strongly in the more recent period. On the other hand, the immediate impact has been to raise expectations about future firm performance. © 2013 Copyright Taylor and Francis Group, LLC.	en_US
dc.relation.ispartof	Applied Financial Economics	en_US
dc.relation.isbasedon	10.1080/09603107.2012.705425	en_US
dc.subject.classification	Finance	en_US
dc.title	Foreign ownership and firm performance: Evidence from Japan's electronics industry	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	23	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	closed_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	23	en_US

Abstract:

Foreign investors have in recent years increased their ownership of Japanese firms. Has this greater involvement contributed to improve firm performance? We show that the answer depends on the assumptions regarding the unobservable firm effects. If the latter are assumed to be time invariant, as in most existing studies, the influence of foreign investors appears to be positive. However, unobserved firm characteristics are unlikely to be constant in the case of electronics firms. Using dynamic panel data estimation, we show that the effect of foreign ownership on operating profits has been initially insignificant, but is starting to show up strongly in the more recent period. On the other hand, the immediate impact has been to raise expectations about future firm performance. © 2013 Copyright Taylor and Francis Group, LLC.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/23444