Foreign Ownership and Firm Value in Japan

I examine the relation between Tobin's Q and the structure of foreign equity ownership for a sample of 945 industrial firms listed in the 1st Section of the Tokyo Stock Exchange. I find evidence of significant curvilinear relation between Q and the fraction of common stocks owned by foreigners in Japan. Q rises until foreign ownership reaches approximately 40% to 45%, then falls back. It appears that, in Japan, foreign institutional investors are good monitors, and foreign industrial firms increase their stakes after firms showing poor operating performance. I also find that R&D intensity and foreign ownership have weaker but a similar pattern of concave nonlinear relationship in Japan. Future research will add variables like foreign CEO appointments and the fraction of foreign members serving in the board, and examine how these variables can affect firm value in Japan.Foreign Ownership, Firm Value, Tobin's Q, Japan

Migration and integration in borderless village: social capital among Indonesian migrant workers in South Korea

Existing research (Guarnizo et al. 2003; Portes, 2001; Cohen and Sirkeci, 2005) has endeavoured to clarify the relationship between migrants’ transnational activities and their integration into the host society. Although there are both positive and negative perspectives on this relationship, it remains unclear whether migrants’ transnational activities are likely to help or hinder their integration into the host society (Vertovec, 2009). This thesis uses the lens of social capital and diaspora identity to shed light on the relationship between Indonesian migrants’ transnational activities and their integration in a multi-ethnic town in South Korea. The influx of migrants from various countries has led to the creation of what is called ‘Borderless Village’, where people have opportunities to build intercultural connections beyond their national group. Based on ethnographic fieldwork with a group of Indonesian migrants, which themselves show social disjunctions in terms of region of origin, language, religious belief and cultural practices, this thesis examines the integration patterns of Indonesian immigrant groups in this town. In terms of whether transnational activities help or hinder integration in South Korea, I argue that both realities co-exist, and that the status of Wongok-Dong as a migrant enclave and the internally divided nature of the Indonesian migrant group itself are key factors in this regard. Indonesian migrants achieve integration among themselves by performing economic and socio-cultural transnational activities, thereby transcending divisions within the group. Although there are differences in terms of their capacity to conduct transnational activities that are shaped by each Indonesian immigrants’ different types of social capital, they are able perform transnational activities through creating and utilising ‘hidden social capital’. This is generated when Indonesian migrants strategically reveal one of their identities, such as Indonesian, Muslim or other positions, rather than emphasising their regional origin in Indonesia to achieve their objectives such as pursuing economic profits, saving face and maintaining livelihood. Through mobilising these additional identities, most Indonesians can access resources that enable them to perform transnational activities – making international phone calls, occupying cultural spaces, participating in national celebrations – beyond their regional affiliations. In this regard, Indonesian migrants integrate into Wongok-Dong by performing transnational activities due to the features of the town as a migrant enclave. However, they are isolated from mainstream Korean society, as they only achieve integration into the multiethnic space of Wongok-Dong. Thus, this research adds crucial dimensions to theories of the relationship between migrants’ transnational activities and integration into their host society through redefining both the features of the diaspora group and the role of social capital

The Very Dark Side of Internal Capital Markets: Evidence from Diversified Business Groups in Korea

This paper examines the capital allocation within Korean chaebol firms during the period from 1991 to 2000. We find strong evidence that, during the pre-Asian financial crisis period in the early 1990's, poorly performing firms with less investment opportunities invest more than well-performing firms with better growth opportunities. We also find the evidence of cross-subsidization among firms in the same chaebol group during the pre-crisis period. It appears that the existence of the "dark" side of internal capital markets explains most part of this striking phenomenon where "tunneling" practice has been common during the pre-crisis period. However, the inefficient capital allocation seems to disappear after the crisis as banks gain more power and market disciplines inefficient chaebol firms.

Do Main Banks Extract Rents from their Client Firms? Evidence from Korean Chaebol

Using a unique data set on all industrial firms listed on Korea Stock Exchange and KOSDAQ stock market from 1991 to 2000, we find that cash ratios for chaebol firms are lower than for non-chaebol firms. Controlling for access to the bond market and financial services arms does not change this result. We do however find that there is a shift in the degree of bank power over the last decade. Consistent with the main bank monopoly hypothesis during the corporate restructuring process after the financial crisis in 1997, the interest differential charged to chaebol firms is significantly higher than the earlier period, suggesting extraction of rents against chaebol client firms by main banks.Cash holdings, bank power, rent extraction, Korean chaebol

Agency Conflicts, Financial Distress, and Syndicate Structure: Evidence from Japanese Borrowers

We examine how borrower firm characteristics affect the size structure in the Japanese syndicated loan market for the 1999-2003 period. Consistent with the view by Lee and Mullineaux (2004), we find that syndicates are smaller when borrowers have higher credit risk, while firms with greater information asymmetry are associated with larger syndicates in Japan. These results are primarily driven by nonkeiretsu (non-business group) firms. This suggests that the role of enhanced monitoring and facilitated renegotiation is especially useful for banks participating in Japanese syndicated loan for non-keiretsu firms. On the other hand, information problems seem to be less severe for keiretsu (business group) firms which tend to have easier access to syndicated loan via the intermediation of in-house banks in the relevant syndicate. Finally, we find that keiretsu (non-keiretsu) firms have less (more) fraction of loan by their agent banks as the maturity rises. It appears that main banks of keiretsu firms with informational advantage are likely to retain less of the loan and form a more dispersed syndicate to "signal' that the loan is of high quality with increased maturity. This further confirms the view that information problems are less severe in the keiretsu firms.

Arhgef16, a novel Elmo1 binding partner, promotes clearance of apoptotic cells via RhoG-dependent Rac1 activation

AbstractElmo is an evolutionarily conserved mammalian ortholog of Caenorhabditis elegans CED-12 with proposed roles during the removal of apoptotic cells, cell migration, neurite outgrowth, and myoblast fusion (Katoh and Negishi (2003) [1], Park and Tosello (2007) [2], Grimsley et al. (2004) [3], Hamoud et al. (2014) [4]). Elmo mediates these cellular processes by interacting with various proteins located in the plasma membrane, cytoplasm and nucleus, and by modulating their activities although it has no intrinsic catalytic activity (Park and Tosello (2007) [2], Hamoud et al. (2014) [4], Li et al. (2013) [5], Margaron, Fradet and Cote (2013) [6], and Mauldin et al. (2013)[7]). Because there are a limited number of proteins known to interact with Elmo, we performed a yeast two-hybrid screen using Elmo1 as bait to identify Elmo1-interacting proteins and to evaluate their mode of regulation. Arhgef16 was one of the proteins identified through the screen and subsequent analyses revealed that Arhgef16 interacted with Elmo1 in mammalian cells as well. Expression of Arhgef16 in phagocytes promoted engulfment of apoptotic cells, and engulfment mediated by Arhgef16 increased synergistically in the presence of Elmo1 but was abrogated in the absence of Elmo1. In addition, Arhgef16-mediated removal of apoptotic cells was dependent on RhoG, but independent of Dock1. Taken together, this study suggests that the newly identified Elmo1-interacting protein, Arhgef16, functions synergistically with Elmo1 to promote clearance of apoptotic cells in a RhoG-dependent and Dock1-independent manner