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Title: Shareholder Heterogeneity and Conflicting Goals: Strategic Investments in the Japanese Electronics Industry
Authors: Colpan, Asli M.
Yoshikawa, Toru
Hikino, Takashi
Del Brio, Esther B.
Issue Date: 23-Jul-2010
Publisher: wiley
Journal title: Journal of Management Studies
Volume: 48
Issue: 3
Start page: 591
End page: 618
Abstract: This article investigates the effects of the changing institutional environment on strategic orientations of Japanese electronics firms during the 1990s. We examine the effects of three different types of shareholders on strategic directions of their invested firms. The first one, foreign portfolio investors, characterizes the emerging influence that pressed for change in corporate strategies. The two domestic shareholders, corporate investors and financial institutions, represent the conventional forces for continuity. Between the two domestic forces, though, while corporate investors attempted to maintain status quo, financial institutions have shifted towards market-oriented behaviour of investment. Specifically, we explore: (1) the influence of each type of shareholder on a firm's diversification strategy and capital commitment; and (2) the moderating effects of firm performance on the relationships between ownership structure and strategic choices. The results suggest that foreign investors prefer the focused product portfolio and conservative capital commitment. They also prefer the reduction of capital investment when the financial performance of their invested firms is poor. Domestic financial institutions are now similarly sensitive to the performance of their invested firms when those firms make strategic investments. By contrast, domestic corporate shareholders remain indifferent to performance, while they aim to maintain relational business ties with invested firms.
Rights: This is the peer reviewed version of the following article: Colpan, A. M., Yoshikawa, T., Hikino, T. and Del Brio, E. B. (2011), Shareholder Heterogeneity and Conflicting Goals: Strategic Investments in the Japanese Electronics Industry. Journal of Management Studies, 48: 591–618, which has been published in final form at
This is not the published version. Please cite only the published version.
DOI(Published Version): 10.1111/j.1467-6486.2010.00958.x
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