The authors studied the effect of ownership structure on human capital investments as indicated by wage intensity, defined as the ratio of expenditure on employee wages to sales, in a sample of 996 Japanese manufacturing firms during their economic recession of 1998-2002. They found that domestic shareholders, with interests beyond financial considerations, enhance wage intensity, especially when performance is low, and thereby safeguard human capital investments. Foreign shareholders with sole interest in financial returns have an opposite effect; they reduce wage intensity when firm performance is low.
corporate governance, Japan, human capital theory, ownership structure, theory of the firm
Asian Studies | Business Law, Public Responsibility, and Ethics | Organizational Behavior and Theory | Strategic Management Policy
Strategy and Organisation
Journal of Management
Yoshikawa, Toru; PHAN, Phillip H.; and DAVID, Parthiban.
The impact of ownership structure on wage intensity in Japanese corporations. (2005). Journal of Management. 31, (2), 278-300. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/2719
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