THE JAPANESE MARKET FOR CORPORATE CONTROL AND MANAGERIAL INCENTIVES

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International Finance Review

ISSN: 1569-3767
Series editor(s): Professor J. Jay Choi

Subject Area: Accounting and Finance

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Document Information:
Title:	THE JAPANESE MARKET FOR CORPORATE CONTROL AND MANAGERIAL INCENTIVES
Author(s):	Jun-Koo Kang, Takeshi Yamada
Volume:	4 Editor(s): J. Jay Choi and Takato Hiraki ISBN: 978-0-76231-068-5 eISBN: 978-1-84950-246-7
Citation:	Jun-Koo Kang, Takeshi Yamada (2003), THE JAPANESE MARKET FOR CORPORATE CONTROL AND MANAGERIAL INCENTIVES, in J. Jay Choi and Takato Hiraki (ed.) The Japanese Finance: Corporate Finance and Capital Markets in ... (International Finance Review, Volume 4), Emerald Group Publishing Limited, pp.59-86
DOI:	10.1016/S1569-3767(03)04004-4 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	We examine bidder returns in Japanese mergers and find that shareholders of bidders experience a significant positive announcement return. Bidder returns are higher when firms acquire targets in the same industry, when their managers performed well before the merger, and when their managers acquire relatively large targets. Unlike non-keiretsu firms, returns to keiretsu firms are higher when they acquire firms operating in different industries. We also find that bidder returns increase with the bidder’s leverage and the bidder’s ties to financial institutions through borrowings. Our evidence is consistent with the view that managerial incentives affect firm value.