Unstash the Cash! Corporate Governance Reform in Japan
IMF Working Papers, August 4, 2014
Source details
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- Unstash the Cash! Corporate Governance Reform in Japan
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Bibliographic details
- Authors: Chie Aoyagi, Giovanni Ganelli
- Published: August 4, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498378253.001
Key findings
- Japan’s high corporate savings might be holding back growth.
- Japan’s weak corporate governance—as measured by available indexes—might be contributing to high cash holdings.
- Empirical analysis on a panel of Japanese firms confirms that improving corporate governance would help unlock corporate savings.
- The main policy implication: comprehensive corporate governance reform should be a key component of Japan’s growth strategy.
Policy recommendations and implications
- Prioritize comprehensive corporate governance reform to reduce excessive corporate cash holdings and support growth.
- Improve governance attributes covered by governance indexes to incentivize firms to reduce cash hoarding and reallocate resources.
- Enhance company disclosure and other governance-enhancing measures to strengthen market discipline and promote more efficient use of corporate savings.