John Buchanan, Dominic Heesang Chai, Simon Deakin Agency Theory in Practice: A Qualitative Study of Hedge Fund Activism in Japan (01 Feb 2014) Available at ECGI: https://ecgi.global/working-paper/agency-theory-practice-qualitative-study-hedge-fund-activism-japan
We look at the reaction to hedge fund activism of managers and shareholders in Japanese firms and explore the implications of our findings for agency theory.
We use a qualitative research design which treats the standard agency-theoretical model of the firm as only one possible approach to understanding corporate governance, to be tested through empirical research, rather than as an assumption built into the analysis. We find that Japanese managers do not generally regard themselves as the shareholders? agents and that, conversely, shareholders in Japanese firms do not generally behave as principals. Our findings suggest that the standard principal-agent model may be a weak fit for firms in certain national contexts.
This paper presents findings from analysis of a dataset of labour laws, based on the Centre for Business Research Labour Regulation Index (CBR-LRI), which has recently been extended to cover 117 countries and the period from 1970 to 2013. The...Read more
Hedge fund activism is associated with improvements in the governance and performance of targeted firms. In this paper, we show that the positive effects of activism reach beyond the targets, as yet-to-be-targeted peers make similar improvements...Read more
A set of policy experiments regarding binding say-on-pay in Switzerland sheds light on the hitherto mostly theoretical argument that shareholders may prefer to have limits on their own power. The empirical evidence suggests a trade-off: Binding...Read more
Corporations play a crucial role in achieving a sustainable world. In achieving corporate sustainability, the current regulatory frameworks generally emphasize the role of the corporate board, but today’s media suggest that institutional...Read more