This is an empirical study analyzing the corporate finance and governance structure in Malaysia before and after the financial crisis of 1997, utilizing the agency cost approach. The contribution of this paper is to link the corporate governance mechanism with the role of banks and corporate ownership structure taking into account the institutional framework and historical background of the Malaysian financial system. Based on data for 375 non-financial KLSE (Kuala Lumpur Stock Exchange) listed companies during fiscal years 1995-99, our analysis is organized into three parts.

Abstract:This study examines the behavioural biases of Japanese institutional investors and discusses implications for their role in corporate governance, based on the findings of a questionnaire survey of fund managers carried out in 2003. Statistical analysis of the survey results reveals a short-term bias in fund managers' investment time horizons, herding, and self-marketing to improve the appearance of portfolio performance under the pressure either of customers or of institutional restraints. We conclude that institutional investors' behaviour contradicts their role as shareholders.

In this paper we review the growth of socially responsible investment (SRI) in the UK and in Japan. We consider the various factors which have given rise to the growth of SRI in both countries. As SRI is currently more mature in the UK than in Japan, we consider ways in which the UK experience may provide some lessons for the growth of SRI in Japan. Significantly, we consider that the use of corporate governance mechanisms such as engagement and dialogue by large shareholders, to solve social, ethical and environmental (SEE) problems in companies, is a realistic route for the development of SRI in Japan. However, these mechanisms need to be designed so that they may operate more efficiently. Pension funds and other investment institutions need to appreciate the value of engagement over screening as an SRI stra-tegy. Further, the disclosure of SRI strategies by pension funds in Japan may contribute to enhancing consciousness about the responsibility of shareholders for the SEE outcomes of corporate activities that they invest in indirectly. We acknowledge, however, that this suggestion may be difficult to implement in the near future. Copyright Blackwell Publishing Ltd. 2004.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This research enters new ground by presenting comparative survey evidence on asset managers' views and behavior in the United States, Germany, Japan and Thailand. Relying on Hofstede's four cultural dimensions, we find that cultural differences are most helpful in understanding country differences which cannot be explained by pure economic reasoning. In short, controlling for various determinants, the dimension of more Individualism predicts less herding behavior, more Power Distance leads to older and comparatively less experienced managers in the upper hierarchy, Masculinity brings men into top positions and to higher volumes of assets under personal responsibility, and Uncertainty Avoidance is related to higher safety margins against the tracking error allowed and relatively more research effort. These consequences, i.e. the culturally different importance of herding, age, experience, gender, tracking error and research effort, clearly affect investment behavior, although in a complex way. JEL-Classification: G 23, G 14, G15, Z10 We do indeed find asset management to be a global business that shows some common global aspects like e.g. strong reliance on fundamental data and related strategies. However, we also find country-specific differences that can hardly be explained by capital market theory but that are consistent with a cultural influence on views and behavior instead. Terms of use: Documents in EconStor mayDefining "culture" has been of scientific interest for centuries (for a critical review, see Kroeber and Kluckhohn, 1952). We rely on the comprehensive, empirically based understanding by Hofstede (1980). He defines culture as collective programming of the mind which is primarily manifested in values and norms, but also more superficially visible in rituals and symbols. This so-called mental programming -also referred to as "software of the mind" -is stable over time and implies the same person showing consistently similar behavior in similar situations. When talking about culture, Hofstede refers to national culture.There have been several research streams in cultural theory in the past decades and cross-cultural research as a multidisciplinary approach ranges from cognitive and social psychology, sociology, anthropology and history, up to management 3 science and economics. This broad and vivid field of research encompasses a variety of approaches and frameworks for cross-cultural analyses. 2In order to examine and compare the viewpoints an...

Purpose This study aims to examine the link between corporate social performance (CSP) and the cost of capital of Japanese firms in 2008-2013, considering the influences of banking relationships and ownership structure. Design/methodology/approach It examines the relation between CSP and the cost of capital in terms of the cost of debt, cost of equity and weighted average cost of capital, using a composite CSP measure based on stakeholder relationships. A regression model is adopted, controlling for bank dependency, ownership structure and firm-specific attributes. Findings Institutional ownership influences the CSP–cost of equity relation and reduces the cost of equity, while CSP is perceived by debtors as not information-mitigating for the observed period. For 2008-2010, the relation between CSP and bank dependency increases the cost of debt; however, the positive influence of bank dependency on the cost of debt dilutes during 2010-2013 as the shift to a more market-oriented financial market in Japan occurs. Practical implications Although bank borrowing is important, especially for small firms, non-financial disclosure makes external financing more flexible. Institutional investors concerned about the non-financial aspects of business, therefore, play an important role in mitigating the information asymmetry that exists in the capital market. Originality/value This study extends research on the CSP–cost of capital link by considering structural changes in financial systems (e.g. capital market perception of CSP and banks as delegated monitors).