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Institutional Ownership, Strategic Choices and Corporate Efficiency: Evidence from Japan
Author(s) -
Chowdhury Shamsud D.,
Michael Geringer J.
Publication year - 2001
Publication title -
journal of management studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.398
H-Index - 184
eISSN - 1467-6486
pISSN - 0022-2380
DOI - 10.1111/1467-6486.00236
Subject(s) - leverage (statistics) , business , stewardship theory , industrial organization , mediation , productivity , institutional theory , capital intensity , affect (linguistics) , stewardship (theology) , economics , human capital , market economy , corporate governance , finance , principal–agent problem , economic growth , management , linguistics , philosophy , machine learning , computer science , political science , law , politics
Based on the tenets of capital allocation systems theory, stewardship theory, and ‘going concern’ concept of business, institutional ownership is proposed to affect corporate productivity, both directly and indirectly, in large Japanese corporations through a set of four firm‐level choices: product/market development, R&D intensity, capital intensity, and leverage. Using data on 118 corporations drawn from five industry sectors in Japan, and applying a partial mediation technique, this study tests an integrated, causal model of the relationships among these variables. Results show mixed support for the model. No direct relationship between institutional ownership and productivity is observed. However, institutional ownership affects productivity indirectly through R&D intensity and leverage. Although product/market development and capital intensity also affect productivity, institutional ownership has no significant relationship with them.