Search Results (66)

Based on firm-level data of Japanese listed companies for the period of 2013–2022, this study conducts an empirical analysis to investigate how the issuance of green bonds influences corporate environmental and financial performance. The results show that the green bond issuance demonstrates a reduction in corporate greenhouse gas emission intensity and energy consumption intensity in the long term. Moreover, the issuance of green bonds enhances the financial performance of firms in the long run. However, the positive effect of green bond issuance on corporate environmental and financial performance is significant only among firms that have set specific quantitative environmental targets. In addition, for manufacturing and transportation green bond issuers that have set specific quantitative environmental targets, the improvement in environmental performance is evident in both the long and short term. Full article

Demands for companies to comply with environmental, social, and governance (ESG) requirements are growing, and companies are also expected to play a role in promoting sustainable development. For companies to achieve sustainable growth while addressing ESG, it must be understood whether ESG activities promote improved corporate financial performance. We conducted a five-year panel data analysis of 635 Japanese firms from FY 2019 to FY 2023, using the PBR, PER, and ROE financial indicators as the dependent variables and CSR ratings in the human resource utilization (HR), environment (E), governance (G), and social (S) categories as the independent variables. The results revealed that, depending on the combination of ESG field and financial indicators, companies with advanced ESG initiatives had greater financial performance, with some cases showing a nonlinear relationship; differences in the results between manufacturing and nonmanufacturing industries were also observed. For companies to effectively advance ESG activities, it is important to clarify the objectives and results for each ESG category. For policymakers to consider measures to encourage companies’ ESG activities, it is also important to design finely tuned regulations and incentives according to the ESG category and industry characteristics. Full article

This study examines the impact of cost stickiness on research and development (R&D) investment and corporate performance in Japanese firms. Additionally, it investigates the moderating effect of managerial overconfidence and financial slack. To do so, we analysed a sample of 4877 observations from Japanese firms listed on the Tokyo Stock Exchange between 2014 and 2020. The results show that cost stickiness generally promotes R&D investment while negatively affecting corporate performance. Further, although managerial overconfidence does not moderate the relationship between cost stickiness and R&D investment, it weakens the negative effect of cost stickiness on corporate performance. Meanwhile, financial slack strengthens the positive impact of cost stickiness on R&D investment, but it does not moderate the relationship between cost stickiness and corporate performance. These findings provide strategic insights into resource allocation behaviour in driving innovation and influencing corporate outcomes in the Japanese market context. Full article

This study investigates the yield-seeking behavior of income-oriented institutional investors, who are essential players in financial markets. While external pressures compelling firms to “reach for yield” are well-documented, the firm-level behavioral drivers underlying this phenomenon remain largely underexplored. Drawing on the behavioral theory of the firm, this study argues that an investor’s performance relative to their social aspiration level (the peer average) influences their yield-seeking decisions, and that this effect is moderated by “portfolio slack,” defined as unrealized gains or losses. To test this theory in the context of persistent low-yield pressure, this study constructs and analyzes a panel dataset of Japanese life insurance companies from 2000 to 2019. The analysis reveals that these investors increase their portfolio income yield after underperforming their peers and decrease it after outperforming. Furthermore, greater portfolio slack amplifies yield increases after underperformance and mitigates yield decreases after outperformance. In contrast, organizational slack primarily mitigates yield reductions after outperformance. This research extends the behavioral theory of the firm to the asset management context by identifying distinct performance feedback responses and proposing portfolio slack as an important analytical construct, thereby offering key insights for investment managers and financial regulators. Full article

Oil prices are volatile. How does this affect Japanese and South Korean firms? Since they import almost all of their oil, oil price increases may harm their economies. To investigate these issues, this paper examines how oil prices affect sectoral stock returns. Using Hamilton’s method to decompose oil price changes into portions driven by global demand and by oil supply, the results indicate that many sectors in both countries benefit from increases in global aggregate demand that raise oil prices. Many industrial firms in Japan that produce advanced products also benefit from supply-driven oil price changes. The finding that many firms benefit from higher oil prices indicates that blanket subsidies to compensate for oil price increases are unnecessary. Targeted subsidies would be more economical and eco-friendly. Many sectors in Japan and Korea that produce for the domestic economy are harmed by oil price increases. Large oil price swings will continue due to wars, tariffs, geopolitical events, and climate change. These will whipsaw sectors in both countries. To shield their economies from oil price changes, Japan and Korea should invest in technologies to improve wind, solar, and hydro power and should facilitate intra-regional trade in renewables. They should also encourage individual sectors such as airlines, cosmetics, agriculture, hotels, semiconductors, and automobiles to reduce their exposure to fossil fuels and to choose environmentally friendly production methods. In addition, both countries should expedite their targets for achieving carbon neutrality. This paper considers ways to achieve these goals. Full article

The choice between domestic and foreign production is one of the most important decisions not only for international business management but also for economic diplomacy and industrial policy. The reality is not a binary choice, but some firms use both. Why do companies maintain labour-intensive production in developed countries in the globalised world? To understand business challenges and strategies, this study examines small and medium-sized enterprises (SMEs) in the garment factory agglomeration in the North (Kenpoku) area of Iwate Prefecture, Japan. The in-depth case study, with a special focus on the six competitiveness factors of Japanese apparel firms, recognises that the ‘Made in Japan’ branding strategy is one of the effective ways to attract Japanese customers. This marketing strategy may motivate some firms to consider international market development. However, most Japanese SME apparel manufacturers play the role of original equipment manufacturer (OEM) for specific domestic market-oriented apparel companies. To meet customers’ strict delivery requirements, our case SMEs are developing multi-skilled workers to cope with high-mix small-lot production and fast delivery simultaneously. This management innovation is essential for building long-term business relationships and trust with corporate apparel buyers and surviving competition from products made in China and other developing countries. Full article

The choice between short- and long-term debt impacts a firm’s financial flexibility and its capacity for sustainable investment. This study examines how Initial Public Offerings (IPOs) and main bank relationships shape debt maturity structures, focusing on Japanese firms listed on the Tokyo Stock Exchange between 2002 and 2015. Using panel fixed effects and difference-in-differences (DID) analysis, we find a temporary extension in debt maturity (i.e., a reduction in the short-term debt ratio) one year post-IPO. Our findings partially support the hypothesis under signaling theory, which states that firms can mitigate asymmetric information problems through IPOs, facilitating the issuance of long-term debt, and thus allowing firms to allocate resources for sustainability projects. Notably, Japanese firms without a main bank relationship experience a more significant and lasting impact, while those with a main bank relationship display minimal changes in debt structure. These findings highlight the critical role of Japanese institutional factors in alleviating information asymmetry and enabling access to long-term financing. Additionally, the findings enlighten studies on financial mechanisms that enable firms to align their strategies with Sustainable Development Goals (SDGs) in the long run. Full article

In recent decades, Japanese rice wine, sake, exports to international countries have developed tremendously. Recently, in particular, sake exports are increasing in both volume and unit value due to factors such as the registration of Japanese cuisine as an intangible cultural heritage of UNESCO in 2013 and the economic situations including the rapid depreciation of Japanese yen. However, there are no studies which investigated sake exports via empirical methods as far as we know. In this study, we constructed hierarchical Bayesian models and analyzed unbalanced panel datasets on the export of Japanese sake to China, Hong Kong SAR China, Singapore, Taiwan and the US by using a Markov chain Monte Carlo (MCMC) method and an ancillary-sufficiency interweaving strategy (ASIS) as the first empirical study of Japanese sake export. As a result, it was found that the trends in export volume and unit value to China, Hong Kong SAR China, Singapore and the US were significantly positive. In addition, although Taiwan had a negative trend before UNESCO registration, the trend became positive after its registration. Based on these results, it can be concluded that Japanese sake has been booming worldwide, though the degree may vary from country to country. Especially, we found that the UNESCO registration of Japanese food, Washoku, has significant effects on booming sake exports both in terms of volume and unit value. Finally, we divided the sake export data by regional customs offices in charge and conducted a detailed analysis on regional heterogeneity in sake exports. From the results, we found there were some different trends among regions. Full article

Using the 2010–2019 Comprehensive Survey of Living Conditions (CSLC) conducted in Japan, we examined the impact of long working hours on mental health in Japan while addressing the endogeneity issue arising from non-random selection bias. We assessed the variations in the effects of long working hours on mental health across different groups. The results show that first, individuals working longer hours (55 h or more per week) exhibited a higher likelihood of developing mental illness than those working regular hours or fewer hours. Second, the negative effect of long working hours on mental health is more pronounced among non-regular workers than among regular workers. Third, the effect of long working hours on mental health varies among different demographic groups, with a greater impact observed among women, managers, non-regular workers, employees in small- or large-sized firms, and those in smaller cities compared to their counterparts. Thus, to enhance worker productivity, the Japanese government should address the issue of long working hours to improve employees’ mental well-being. Initiatives aimed at promoting work–life balance, family-friendly policies, and measures to ameliorate working conditions are expected to help mitigate the challenges associated with long working hours and mental health issues, especially among non-regular workers. Full article

Japanese firms are accelerating their engagement in horizontal collaboration through unprecedented inter-firm combinations that allow organizations to respond flexibly and quickly to changes in the external environment. However, existing research has not sufficiently examined trust formation and individual interaction processes in the initial stages of such inter-organizational collaboration. This study examines a newly established value-creation consortium led by the private sector that uses state-of-the-art artificial intelligence (AI) technology to solve social issues. We interviewed consortium members in different positions; the steps for coding and theorization (SCAT) were used to analyze individuals’ interactions in the initial stage of forming inter-organizational collaboration. The results showed that the members’ willingness to collaborate increased due to the leader exhibiting trustworthy behavior. Furthermore, uncertainty caused by AI’s technological specificity led to insecurity, creating role ambiguity and role conflicts, which leaders and members overcame to form interdependent relationships among individuals. The indication of such a process is a new finding, the practical implications of which are discussed. Full article

This paper explores the influence and significance of the activities of the monks’ militia during the Japanese invasion of Chosŏn, from the perspective of the religious efficacy of Buddhism and the spread of the Buddhist concept of wonder. After examining the concept that the monks’ militia played an important part in the war, fighting against enemies in major battles and constructing and defending fortresses, this paper proposes that the religious efficacy of Buddhism was revealed through the performance of burial and guiding ceremonies. Restoring the religious wonder of Buddhism, which had been criticized by the Confucian literati, Buddhist rituals for consoling the bereaved and praying for the welfare of the dead came to thrive. A dilemma existed between the principle of keeping the Buddhist precepts and the reality of fulfilling the demands of loyalty since the activities of the monks’ militia greatly damaged the Buddhist community. While killing was a direct infringement of the values of the sangha, the monks violated this precept in the cause of protecting the state and practicing loyalty. In this situation, where there was such a dilemma between the Buddhist and secular worlds, these monks’ prioritization of loyalty not only indicated the desperate national situation of the time but also reflected the social, cultural, and political context of the Confucian society of Chosŏn. This paper also explores how renowned generals of the monks’ militia, including Samyŏng Yujŏng, emerged as heroes among the people, and memories of their deeds were transmitted through wonder stories. Yujŏng was highly praised as a symbol of Buddhist loyalty, and his heroic story was expanded and reproduced among the population through folk tales and novels. While the intellectuals of Chosŏn who followed Confucian values did not believe those wonder stories, the trauma that the war left behind demanded the appearance of wondrous heroes who helped people overcome that trauma, and this demand enabled Yujŏng to emerge as one of these heroic figures. The activities of the monks’ militia, the religious efficacy of Buddhism, and the creation of the heroic narratives of the monks’ militia generals prove that Buddhism had a firm foundation in late Chosŏn society. Full article

Japan exports sophisticated capital goods. Since the Global Financial Crisis (GFC), Japanese companies have offshored the production of lower-end goods and parts and components to Asian countries. Because of this, several researchers argued that a weaker yen no longer stimulates machinery exports much because an increase in Japanese exports increases parts and components imports from overseas Asian subsidiaries. This paper finds that, after the GFC, a weaker yen no longer increases Japanese machinery exports to Asia but continues to stimulate exports outside of Asia. Thus, the weaker yen since 2020 does not help Asian firms to import vital Japanese capital goods but does increase the profitability of Japanese manufacturers and their exports to non-Asian countries. Full article

This study examines stock market response (SMR) to the Japanese tourism industry (TI) after the government’s announcement of travel subsidies (TRSs) during the COVID-19 pandemic in 2020, using a sample comprising 80 listed Japanese firms in the TI and an event study method (ESM) to determine the impact of government policy responses (GPRs) to the pandemic. This study found that investors in the TI reacted positively to the announcement of subsidies; this positive effect persisted for 50 trading days after the announcement but was weaker for transportation firms. The results suggest that TRSs are important for the TI, with a stronger link to travel-related firms, such as airlines and travel agencies, hotels, and amusement services. However, investors in the TI reacted negatively to policies that directly addressed the pandemic, such as social distance policies (SDPs). These results are robustly confirmed when we measure abnormal returns by using a three-factor model. The results offer useful insights for policymakers and practitioners aiming to mitigate economic loss from disasters such as the COVID-19 pandemic. Full article

Of the significant foreign investment by Japanese multinationals within South-East Asia, the Philippines is a key recipient and location for the establishment of subsidiaries. While foreign investment is thought to bring significant benefits to host nations, the Philippines is considered ecologically vulnerable with extensive pollution and environmental challenges. Within national contexts of this nature, debates ensue about manufacturing multinational enterprises using emerging markets or developing nations as pollution havens when their environmental regulations are less stringent than those of the home nation. This study adopts a case study approach to explore the behaviour of Japanese multinationals operating in the Philippines with respect to environmental regulations. The study’s findings indicate that the firms demonstrated environmental management practices at a level beyond requirements set by local laws and regulations, with supplementary benefits to the surrounding local communities. These results indicate that the Philippines’ environmental regulations could be strengthened or tightened up with little negative impact on the investment of Japanese manufacturing multinational enterprises. With scant research conducted at the organisational level, our research findings contribute to a multinational management perspective on pollution haven/halo research, providing an additional dimension alongside the macroeconomic and large-scale environmental effects. Full article

The trade distance is an important constraining factor underpinning the emergence of social and economic interactions of complex systems. However, agent-based studies supported by the granular analysis of distances are limited. Here, we present a complexity method that places the actual geographical locations of individual firms in Japan at the epicentre of our research. By combining methods derived from network science together with information theory measures, and by using a comprehensive dataset of Japanese inter-firm business transactions, we evaluate the effects of spatial features on the structural patterns of the economy. We find that the normalised probability distributions of the distances between interacting firms obey a power law like decay concomitant with the sizes of firms and regions. Furthermore, small firms would reach large distances to become customers of large firms, while trading between either only small firms or only large firms tends to be at smaller distances. Furthermore, a time evolution analysis suggests a reduction in the overall average trading distances in last 20 years. Lastly, our analysis concerning the trading dynamics among prefectures indicates that the preference to trade with neighbouring prefectures tends to be more pronounced at rural regions as opposed to the larger central conurbations. Full article