Open AccessStudying the Relationship between Japanese Firms' Corporate Health and Results
Author(s) -
Foo See Liang,
Shaakalya Pathak
Publication year - 2019
Publication title -
archives of business research
Language(s) - English
Resource type - Journals
ISSN - 2054-7404
DOI - 10.14738/abr.79.7087
Subject(s) - return on equity , equity (law) , stock exchange , stock market , regression analysis , position (finance) , economics , business , demographic economics , econometrics , financial economics , geography , statistics , political science , finance , mathematics , context (archaeology) , archaeology , law
Japan is a key leading economy in the Asia Pacific region. This study examines the relationship between the financial health, as measured by the Altman Z-Score, and corporate performance, as measured by the Return on Equity (ROE), of listed manufacturing companies in this market (the Tokyo Stock Exchange). A linear regression has been conducted between these variables to determine the magnitude and direction of their relationships. The trends of Z-Scores over a five-year period have also been analysed. The analysis covers the period from 2013 to 2017 (inclusive) and yields a statistically positive correlation between ROE and the Z-Score for the market. Japan registered moderate-to-strong mean and median Z-Scores. These findings further support the strong economic position of this market as an Asian giant.