Non-Controlling Interests and Proxy of Real Activities Manipulation in Stakeholder-Oriented Corporate Governance*

• 영문명: Non-Controlling Interests and Proxy of Real Activities Manipulation in Stakeholder-Oriented Corporate Governance*
• 발행기관: 한국유통과학회
• 저자명: Kento FUJITA Akihiro YAMADA
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 9 No.10, 105~113쪽, 전체 9쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2022.12.31

영문 초록

The purpose of this paper is to analyze the relationship between the ratio of non-controlling shareholder interests (minority equity ratio, MER) and the measurement error in real activities manipulation (RM) proxy for Japanese firms. Many Japanese firms have practiced stakeholder-oriented corporate governance systems. Previous studies suggest that the higher the MER, the more Japanese businesses tend to employ management techniques for the group’s sales growth while also reallocating resources inside the group to reduce principal-principal conflicts. Such differences in management strategies by firms could lead to measurement error in the RM proxy. The analysis uses 16,450 firm-years listed on the Tokyo Stock Exchange. The results of our analysis show that there is a positive relationship between MER and the RM proxy, and high persistence of RM proxies, suggesting that the RM proxies may contain measurement error. We also find that MER is correlated with variables associated with management strategy and that controlling for these variables can reduce the measurement error of RM proxy in firms with large MER. This study extends previous research on measurement error in RM proxy by relating them to ownership structure and corporate governance. This paper would contribute to researchers examining issues related to RM.

목차

1. Introduction

2. RM Measurements and Research Question

3. Results and Discussion

4. Conclusion

References

Appendix

키워드

Real Activities Manipulation Earnings Management Principal-Principal Conflicts Stakeholder-Oriented Corporate Governance