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A multitude of corporate governance reforms were enacted in Japan from 1997-2005. As a result of one of those reforms, beginning in 2003 Japanese companies had the option of choosing a committee system of corporate governance, one partially modeled on the American system, rather than the auditor system.

On May 14, SPRIE Researcher Robert Eberhart spoke at a SPRIE seminar about his current research assessing the effect of the Japanese reforms and the question of whether the corporate system in Japan will ultimately be converging with the Western model.

We compared two groups of committee system and auditor system companies and found that the firms using committee system governance, the so-called American model, were significantly valued higher as measured by Tobin's q--thirty- and forty-percent higher.

In researching the performance of Japanese companies under the committee system, Eberhart's current study has found significantly (30%-40%) higher Tobin's q scores for those companies following the committee system over those following the auditor system. This observation seems independent of other financial variables differentiating these companies. The research focused on 63 companies in the pharmacueuticals, electronics, and machine industries.

Tobin's q is the ratio of a firm's market cap to the replacement value of its assets. Since the change in Tobin's q was immediate, based on monthly data, this suggests a change in market evaluation, Eberhart noted, since the asset value would not have changed so quickly.

One possibility, Eberhart ventured, is that by opening themselves up to the committee system, management is indicating a confidence in the veracity of the firm's fiscal monitoring system, and the market is responding to that confidence.

Eberhart concluded by noting that these results are preliminary and further research is necessary to precisely determine the nature of these performance differences.

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New Beginnings, a nonpartisan policy study group of former senior U.S. officials and other experts on Korea, will discuss the results of President Lee's visit and the prospects for forging a real partnership with South Korea at the World Affairs Council, San Francisco on June 3.

Panelists:

Michael H. Armacost, former U.S. Ambassador to Japan and the Philippines, and former Under Secretary of State for Political Affairs; currently the Shorenstein Distinguished Fellow, Asia-Pacific Research Center (APARC), Stanford University

Evans J.R. Revere, President of the Korea Society, and former Principal Deputy Assistant Secretary of State for East Asian and Pacific Affair

Gi-Wook Shin, Director of Shorenstein APARC and Professor of Sociology, Stanford University

Daniel C. Sneider, Associate Director for Research, Shorenstein APARC, Stanford University, and formerly a foreign affairs correspondent and columnist

David Straub, Pantech Research Fellow at Stanford's Shorenstein APARC, and a former State Department Korean affairs director

Bruce Pickering, Executive Director of the Asia Society Northern California (moderator)

This event is co-sponsored by the Asia Society of Northern California and World Affairs Council.

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In this session of the Shorenstein APARC Corporate Affiliate Visiting Fellows Research Presentations, the following will be presented:

Kazuhiko Ejima, "Reconstructing Japan's Public Finance"

Japan, the second largest economy in the world, is secretly facing public finance crisis with the worst debt-to-GDP ratio among developed countries. What led Japan into such crisis? How to get rid of it? In Japan, it is widely believed that raising the consumption tax is the best approach to fixing Japan’s finances. In contrast, Ejima argues, based on an assessment of the current political situation, that any new budget reconstruction plan should focus more on the expenditure side than on the revenue side, and that it should include reform of the public sector.

Naoki Hiyama, "Newspaper as an Industry:  Seeking New Business Model - Beyond Free News Website"

From the beginning of the internet age, for newspaper companies in advanced countries, revenue from print paper has declined. Still, web news sites are not profitable. Hiyama’s research presentation will explore how newspaper companies can survive in this internet age.

Kaoru Fukushima, "Present and Future Condition of Solar Power Generation Market in Japan and California"

California is enthusiastic about environment. PG&E fully cooperates with people to install solar power on rooftops. California has good geographical conditions for solar power compared to Japan. However, the diffusion of solar power in California is much smaller than that in Japan. What is the reason? What is the perspective for the future in Japan / in California? Fukushima’s research will analyze the difference from various aspects.

Philippines Conference Room

Kazuhiko Ejima Corporate Affiliate Visiting Fellow, Ministry of Finance, Japan Speaker
Naoki Hiyama Corporate Affiliate Visiting Fellow, The Asahi Shimbun Speaker
Kaoru Fukushima Corporate Affiliate Visiting Fellow, Kansai Electric Power Company Speaker
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In this session of the Shorenstein APARC Corporate Affiliate Visiting Fellows Research Presentations, the following will be presented:

Mari Ichinomoto, "The Method for Attracting Semiconductor Industries with Fabless Policies in Japan"

Recently most local governments in Japan are exploring overseas firms who have interests to expand their business in Japan. But now other Asian countries are becoming tougher competitors. What can the local governments do to achieve their mission? Is there a good way to compete against other countries in order to achieve their goal?

Takao Isozaki, "Organization Change - Preparation for DBJ's Privatization"

The Development Bank of Japan (DBJ), one of the Japanese governmental financial institutions, will be fully privatized for 5 to 7 years. Isozaki’s research examines what kind of aspects DBJ's workers should take into account as preparation for its privatization process.

Hisashi Kanazashi, "Comparison and Analysis of US-Japan Policies for Innovation"

After catching up with developed countries and experiencing the collapse of the bubble economy, Japan has struggled to recover. The key word during the struggle was “innovation”, and the Japanese government has pushed many reforms to encourage it. However, is the reform for innovation in Japan sufficient? The goal of Kanazashi’s research is to examine it by analyzing the recent trend of start-ups and comparing policies in the United States and in Japan.

Philippines Conference Room

Mari Ichinomoto Corporate Affiliate Visiting Fellow, Kumamoto Prefecture Speaker
Takao Isozaki Corporate Affiliate Visiting Fellow, Development Bank of Japan Speaker
Hisashi Kanazashi Corporate Affiliate Visiting Fellow, Ministry of Economy, Trade & Industry, Japan Speaker
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In this session of the Shorenstein APARC Corporate Affiliate Visiting Fellows Research Presentations, the following will be presented:

Atsushi Goto, "What is the Optimum Strategy for Broadcasting Companies?"

Goto’s research will describe the potential risks for broadcasters and then categorize top-tier broadcasters into several groups based on their strategies. Additionally, he will explain the optimum strategy for broadcasters, hypothetically, and the argument that he has made with experts in this area. Finally, Goto will conclude with the outlook of the broadcasting market.

Natsuki Kamiya, "Bilingual Education for Children of Immigrants"

The 1989 revision of Japan’s Immigration Law facilitated an influx of Brazilians to Japan. As a result, there are 50,000 Brazilians in the Shizuoka Prefecture. Although they have Japanese ancestry, their lack of proficiency in the Japanese language makes it difficult for them to assimilate into Japanese society. Kamiya’s research will cover bilingual education in the United States in order to make policies that will help Brazilian children learn Japanese while retaining Portuguese.

Yotaro Akamine, "Produce or Reduce? A Feasibility Study of Introducing Heat Pump Water Heaters as an Environmental Solution in California"

In 2006, a strong environmental regulation, AB32, became effective in California. Akamine’s research shows the feasibility of introducing "heat pump water heater", Japanese commercialized technology, as a solution to the environmental issue, as compared to solar photovoltaic business, which has prevailed in California.

Xiangning Zhang, "The Practices of the American Energy Policies -- American Major Oil Companies' Development Strategies and Practices"

The high oil prices ushered in the third global energy crisis. The United States has issued and put in force a series of new policies and acts to try to establish an energy jurisprudence through legislation. It is now a transitional period in the new energy age, where oil and gas still play a critical role in the energy consumption structure, but alternative resources are getting more attention. Major oil companies are becoming super giants in the integrated energy industry. The United States faces a long road ahead until it reaches parity with its European neighbors in new energy policies and practices.

Philippines Conference Room

Atsushi Goto Corporate Affiliate Visiting Fellow, Sumitomo Corporation Speaker
Natsuki Kamiya Corporate Affiliate Visiting Fellow, Shizuoka Prefecture Speaker
Yotaro Akamine Corporate Affiliate Visiting Fellow, Tokyo Electric Power Company Speaker
Xiangning Zhang Corporate Affiliate Visiting Fellow, PetroChina Company Speaker
Seminars
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In this session of Shorenstein APARC Corporate Affiliate Visiting Fellows Research Presentations, the following will be presented:

Soichi Yushina, "The Role of Intellectual Property in the Innovation System"

Some Japanese working in the intellectual property field believe that in Silicon Valley (1) worker mobility is very fast and (2) trade secret is not protected sufficiently. Yushina’s research will try to answer if this is true or a myth?

Xuteng Hu, "Corporate Governance of China's Overseas Listed State-Controlled Companies"

Corporate governance is always the most complicated and difficult issue in both theoretical research and practical management of modern companies in the world. Corporate governance has become a hot issue in economic community, especially after Enron's bankruptcy. Hu's research focuses on the corporate governance of these companies and their operation, taking into account the rules on their relationship with parent companies, appointment of executives, formation of board of directors and supervisor board, information disclosure, and protection of medium and small investors' interests.

Noriaki Komori, "Key Success Factors for Online Commerce"

Amazon.com is the largest pure-online commerce company. In researching what the key success factors are, Komori describes their customer centric culture and technology to develop their system.

Philippines Conference Room

Soichi Yushina Corporate Affiliate Visiting Fellow, Japan Patent Office Speaker
Xuteng Hu Corporate Affiliate Visiting Fellow, PetroChina Company Speaker
Noriaki Komori Corporate Affiliate Visiting Fellow, Sumitomo Corporation Speaker
Seminars
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The Walter H. Shorenstein Asia-Pacific Research Center has selected Benjamin Self as the Takahashi Fellow in Japanese Studies. He will take up his position at the start of the 2008-2009 academic year.

As a senior research scholar, Self will develop and promote Japanese studies and research at Shorenstein APARC. Self has worked across a broad range of topics related to contemporary Japan, analyzing issues in security, international relations, domestic politics and political economy.
"We very much look forward to Ben joining us at the center. Japanese studies and research have been a historic strength at the center and we have great plans for strengthening and broadening these programs." says director of the center, Gi-Wook Shin
Self comes to Shorenstein APARC from the Henry L. Stimson Center where he was a senior associate. Previously, he worked with the Woodrow Wilson International Center for Scholars in Washington, D.C. and was a visiting research fellow at Keio University in Tokyo where he conducted research on Japanese foreign and security policy, with particular focus on Japan-China relations.

Self returns to Stanford University where he received his A.B. in political science. He also received a M.A. in Japan studies and international economics from Johns Hopkins University's Nitze School of Advanced International Studies.

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