Relationship between Founder's Control and the Financial Position of Japanese Firms : Empirical Study

Abstract

This study revealed how the structure of corporate ownership affected the financial position. We focused on Japanese family firms. We classified 1,323 Japanese listed manufacturing firms whether 1) the founder or his/her family was included in the top ten shareholders or 2) the founder or his/her family was one of the board members. As the conclusion, we found that firms in which the founder or his/her family was included in both the top ten shareholders and the board members had grown substantially and showed the tendency to accumulate the profit internally more than other types of firms. Also, comparing firms of which the founder or his/her family was included only in board members with firms of which the founder or his/her family was included only in the top ten shareholders, the former showed better financial position than the latter. In this study, when one of the board members was a founder or his/her family, having suitable influence on the financial position was verified.