Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 24, No. 3, pp.287-331
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2011
Received 09 Nov 2010 Revised 12 Jan 2011 Accepted 19 Jan 2011

Managerial Entrenchment and Antitakeover Provisions in Japan

Kaoru Hosono ; Miho Takizawa ; Kotaro Tsuru
Corresponding Author, Visiting Fellow, Gakushuin University, Department of Economics, 1-5-1 Mejiro, Toshima-ku, Tokyo 171-8588, Japan, Tel: +81-3-3986-0221, Fax: +81-3-5992-1005
Associate Professor, Toyo University, Department of Economics, 5-28-20 Hakusan, Bunkyoku, Tokyo 112-8606, Japan, Tel: +81-3-3945-7423, Fax: +81-3-3945-7667
Senior fellow, Research Institute of Economy, Trade and Industry, 11th Floor, Annex, Ministry of Economy, Trade, and Industry (METI), 1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan, Tel: +81-3-3501-8289, Fax: +81-3501-8416

JEL Classification: G34


We analyze the characteristics of the firms that introduce antitakeover provisions using a Japanese firm-level dataset. We find that the likelihood of the adoption of antitakeover provisions is correlated positively with firm age and the proportion of cross-shareholding and negatively with the share of managerial ownership. The adoption of antitakeover measures is suggested to be motivated by self-protection on the part of managers and is influenced by the conflicts of interest between managers and shareholders. We also find that the operating performance or the stock market valuation does not affect the likelihood of the adoption of antitakeover provisions.


Antitakeover provisions, Entrenchment, Japan


The authors are grateful to the Editor, Referees, and the participants at the seminar of RIETI for their helpful comments and suggestions. K. Hosono and K. Tsuru acknowledge the support of RIETI and the Grant-in-Aid for Scientific Research (C) No. 20530228, Japan Society for the Promotion of Science. K. Hosono also acknowledges the support of the Grant-in-Aid for Scientific Research (S) No. 22223004, Japan Society for the Promotion of Science. Views expressed in this paper are those of the authors and do not necessarily reflect those of the institutions to which the authors belong.


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