Historically, in Japan, out-of-court corporate restructurings have played a significant role in disciplining managers in the near-absence of hostile takeover activity and shareholder activism. This paper analyzes management turnover in a large sample of Japanese firms that underwent restructurings between 1981 and 2010. I find that restructurings that happen in later stages of financial distress, and those that are not initiated by the firm itself, are more likely to involve management turnover, as are restructurings in which the firm's main business operations are left intact. Furthermore, in restructurings after the reforms around the year 2000, management turnover is more likely to occur if the local potential managerial labor market is substantial. After controlling for firm characteristics and the firm's initial financial condition, it does not appear that management turnover is associated with an improvement in post-restructuring operating performance--in fact, the effect is significantly negative by estimates that address the non-random nature of management turnover. However, for restructurings led by equity funds, management turnover is associated with a more successful turnaround of the firm's performance. These results suggest that equity funds possess the ability to locate and recruit talented outside managers in a thin market for experienced managers.

Michael Furchtgott is an economist interested in corporate finance and governance. His current research investigates Japanese corporate restructurings and the behavior of firms and lenders when financial distress arises.

Furchtgott has completed his PhD in economics at the University of California, San Diego, where his research on corporate financial restatements has demonstrated that firms frequently circumvent laws designed to protect investors.

He holds a BA in economics and mathematics from Columbia University.

 Abstract:

That the Cairo Conference has been overshadowed by the wartime summits at Teheran and Yalta is understandable given the start of the Cold War in Europe almost immediately after the German surrender in May 1945. To understand the collapse of relations between the Anglo-American allies on the one hand and the Soviet Union on the other, it is important to look at the conferences at Teheran and Yalta, the interactions between Churchill, Roosevelt, and Stalin, the understandings they reached, and their misunderstandings. That said, the Cairo Conference also marked an important turning point in the relations between the allies in the war against Japan: China, Great Britain, and the United States, the consequences of which were critical to the defeat of Japan and the post-war order in East Asia.

The interaction of Churchill, Roosevelt, and Chiang in Cairo is every bit as compelling from a human interest perspective as the interplay between Churchill, Roosevelt, and Stalin at Teheran and Yalta, albeit less studied, and offers a sobering reminder of what can happen when policy is made at the very highest level by individuals who know relatively little about the culture of their partners and are not able to separate myths and stereotypes from realities. Summit conferences may make for good theater, but do not necessarily result in good policies as an examination of the Cairo Conference reveals.

Each of the parties at the Cairo Conference came with their own agendas, frequently contradictory. Generalissimo and Madame Chiang hoped to obtain a commitment to make the China-Burma-India theater of war the focal point in the war against Japan, a matter not only of strategic importance to them but also of poetic justice. They also sought to redress grievances against Japan and Great Britain in the post-war era. Roosevelt hoped to buoy the ego and spirits of Chiang and to insure that the Kuomintang regime would not make a separate peace with Japan thus allowing the Japanese to redeploy the nearly one million troops they had stationed in China. Churchill had no real interest in meeting with Chiang and his wife at Cairo at all, but felt obliged to humor Roosevelt and to make sure that no agreements would be reached in Cairo that would in any way prejudice British colonial interests in Southeast Asia in the post-war era. Given these conflicting agendas, it is no wonder that none of the participants would be satisfied with the results of their labors in Cairo.

Speaker Bio:

Ronald Heiferman is Professor of History and Director of the Asian Studies Program at Quinnipiac University in Hamden, Connecticut, and a Fellow of Berkeley College at Yale University. He has also taught at Connecticut College and the City University of New York. Dr. Heiferman was educated at Yale and New York University (Ph.D.). Professor Heiferman has authored or co-authored more than a dozen books, including Flying Tigers (New York: Ballantine, 1971), World War II (London: Hamlyn, 1973), Wars of the Twentieth Century (London: Hamlyn, 1974), The Rise and Fall of Imperial Japan (New York: Military Press, 1981), the Rand-McNally Encyclopedia of World II (New York: Rand-McNally, 1978), and The Cairo Conference of 1943: Roosevelt, Churchill, Chiang Kai-shek and Madame Chiang (McFarland, 2011). His latest book, The Chinese Idyll of Franklin D. Roosevelt, will be published in 2014. Professor Heiferman was a Yale-Lilly Fellow in 1978, a Yale-Mellon Fellow in 1984, and has also been the recipient of five National Endowment for the Humanities Fellowships: Duke University (1974), University of Chicago (1977), Stanford University (1980), Harvard University (1987), and the University of Texas (1991).