(Major study on the shift in Japan from true owners exercising a voice, to voiceless cross-shareholdings in the post 1960 perior. ByJulian Franks, London Business School, CEPR and ECGI;Colin Mayer,University of Oxford, CEPR and ECGI; andHideaki Miyajima,Waseda University, WIAS and RIETI.)
Abstract: Twentieth century Japan provides a remarkable laboratory for examining how an externally imposed institutional and regulatory intervention affects the ownership of corporations. In the first half of the century, Japan had weak legal protection but strong institutional arrangements. The institutions were dismantled after the war and replaced by a strong form of legal protection. This inversion resulted in a switch from Japan being a country in which equity markets flourished and ownership was dispersed in the first half of the century to one in which banks and companies dominated with interlocking shareholdings in the second half of the century.