Are Japanese companies less risky and less profitable than US companies? Evidence from a matched sample

Jiangtao, Fu; Ogura, Yoshiaki

doi:10.1016/j.japwor.2019.100960

Cited by 3 publications

(1 citation statement)

References 22 publications

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“…The Wilcoxon test is commonly used to compare the medians of variables belonging to two groups. In the literature on the subject, the Wilcoxon test was used to compare the median return on assets (EBITDA / assets) (Fu and Ogura, 2019), financial liquidity (Mateus and Mateus, 2021), EBIT margin (Li et al, 2019), or comparisons resulting from the implementation IFRS 8 (Göttsche et al, 2021).…”

Section: Conceptual Research Model and Hypotheses Developmentmentioning

confidence: 99%

Does Adoption of Latest Modifications of IAS 16 Influence on Company’s Profitability? Evidence from European Companies

Luty¹,

Petković²

2021

ERSJ

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Purpose: This study aims to investigate the influence of applying IFRS on European companies' profitability. The research focuses on adopting the new IFRS 16, specifically the accounting treatment of leases. The new standard introduces revolutionary changes in the treatment of leasing contracts. Many companies have moved away from IFRS, so it is essential to check the impact of IFRS on other companies. Design/Methodology/Approach: The study includes an analysis of two periods, before and after implementing IFRS 16 (leasing). In the study, we focus on specific sectors of economic activity. We examine the distributions of individual variables and compare the medians using parametric and non-parametric tests. The survey results indicate whether the implementation of IFRS 16 negatively affected the results of the companies. Findings: The study proves that adopting new IAS 16 related to leases does not negatively influence companies' profitability than the previous treatment of this financial position within financial statements. This study confirms that European companies improve profitability by adopting new modifications of the IAS 16. Practical Implications: The study represents a motive for managers to accept new accounting treatments of leases that will create tangible value and generate further economic benefits. Originality/Value: We examined companies implementing new assumptions for the recognition of leasing. Contrary to the numerous voices of practitioners pointing to the negative effects of the implementation of IFRS 16, we showed that the implementation of IFRS 16 did not significantly change the profitability of companies. Thus, it can be indicated that the primary objective of introducing IFRS 16, to organize the recognition of company assets, has been met.

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Section: Conceptual Research Model and Hypotheses Developmentmentioning

confidence: 99%

Does Adoption of Latest Modifications of IAS 16 Influence on Company’s Profitability? Evidence from European Companies

Luty¹,

Petković²

2021

ERSJ

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Increasing shareholder focus: the repercussions of the 2015 corporate governance reform in Japan

2021

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The corporate governance reform promulgated in 2015 in Japan has contributed to a substantial increase of board independence and a reduction of average board tenure. Our empirical analysis covering 3405 public companies demonstrates that reinvigorated corporate oversight and an increasing post-reform shift towards prioritization of shareholder value have led to a persistent increase of corporate profitability, asset productivity, dividend payouts, acquisitions’ value, and valuation multiples. We also document a significant increase of sensitivity of executives’ and directors’ compensations to the dynamics of firms’ bottom lines. The positive changes are the most pronounced within companies where independent directors constitute a majority on the board. The most notable drawbacks of the reform are a significant reduction in net employment creation and in employee turnover within the largest companies. These might be a possible reason for the documented improvement in corporate performance. The number of part-time employees has also seen a significant increase. While being prima facie focused on reinvigorating the private sector, the corporate governance reform may implicitly undermine the established social contract based on job security. Therefore, our study is important from the perspective of sustainable development of the corporate sector as it demonstrates that while concentrating on improving corporate governance, it is also necessary to consider the business’ social responsibility.

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More-money and less-cash effects of diversification: Evidence from Japanese firms

Ushijima

2020

Japan and the World Economy

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Firms that operate in multiple industries can use cash flow generated by a business to fulfill the debt obligations and investment needs of other businesses. Because of such coinsurance effect, industrial diversification may increase firms' optimal leverage and also enable them to hold less liquidity for precautionary motives. I examine this possibility based on a sample of public Japanese firms. Regressions show that after controlling for various determinants of capital structure, diversified firms are significantly more leveraged, while holding less cash, than representative focused firms in the same industries. Moreover, these effects are stronger for more diversified firms and robust to control for unobserved heterogeneity and endogeneity. My results lend support to the view that diversification increases the financial flexibility of firms by enlarging the size and scope of internal capital markets.

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Are Japanese companies less risky and less profitable than US companies? Evidence from a matched sample

Cited by 3 publications

References 22 publications

Does Adoption of Latest Modifications of IAS 16 Influence on Company’s Profitability? Evidence from European Companies

Does Adoption of Latest Modifications of IAS 16 Influence on Company’s Profitability? Evidence from European Companies

Increasing shareholder focus: the repercussions of the 2015 corporate governance reform in Japan

More-money and less-cash effects of diversification: Evidence from Japanese firms

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