Keiei Shigaku (Japan Business History Review)
Online ISSN : 1883-8995
Print ISSN : 0386-9113
ISSN-L : 0386-9113
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Volume 54, Issue 2
Displaying 1-4 of 4 articles from this issue
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Articles
  • How does Adopting a Pure Holding Company System Change the Management of Japanese Firms?
    Minoru Otsubo
    2019 Volume 54 Issue 2 Pages 5-22
    Published: 2019
    Released on J-STAGE: September 30, 2021
    DOIhttps://doi.org/10.5029/bhsj.54.2_5
    JOURNAL FREE ACCESS
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    The number of Japanese firms adopting a pure holding company system has increased since changes to the anti-trust law in 1997. This study investigates how adopting the pure holding company system changes the management of Japanese firms. Since the changes in anti-trust laws, many researchers have highlighted the merits of a pure holding company, such as efficient internal capital market, easy Mergers and Acquisitions (M&As), and easy divestiture. This study expects that adopting the pure holding company form drastically changes the scales of business departments, which enhances their performance, that is, a pure holding company results in the corporate restructuring of business departments.
    The results of the empirical study reveal the following four facts. First, firms with lower performance tend to adopt the pure holding company system. Second, firms adopting thepure holding company tend to reduce the scale of major business segments, which lower firm performance. These results indicate that Japanese firms adopt the pure holding company system to reduce the scale of major business segments with lower performance. Third, M&As increase the scale of non-major business segments; in other words, they increase product diversification. Simultaneously, firms adopting the pure holding company system do not increase the number of M&As after adoption. Although M&As contribute to the growth of non-major business segments, firms adopting a pure holding company system do not increase the number of M&As after adoption. Finally, the decrease of major business segments improves the performance of firms with a pure holding company system.
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  • Motives for Pure Holding Company Formation for Merging Regional Banks and Post-merger Performance
    Shinya Kawamoto, Takuya Kawanishi, Takashi Saito
    2019 Volume 54 Issue 2 Pages 23-39
    Published: 2019
    Released on J-STAGE: September 30, 2021
    DOIhttps://doi.org/10.5029/bhsj.54.2_23
    JOURNAL FREE ACCESS
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    Mergers of regional banks through pure holding companies have been increasing since the latter 1990s. Such mergers were examined for this study, with emphasis on determinants of such mergers and banks’ post-merger business performance.
    A cause of the increase in mergers is that, in addition to the conventional methods of mergers, a ban on the method using a bank holding company was lifted in 1998. In advance of empirical analysis, we reviewed changes in bank mergers after lifting of the ban. We categorized merger methods into (1) business consolidation, (2) combination by establishing a holding company, and (3) purchase of a bank by an existing holding company, which revealed that many mergers in recent years used the second method.
    Subsequently, we examined determinants of becoming a merging bank and a merged bank. Our estimation revealed that a regional bank with low local market power and particularly intense competition with large banks was more likely to become a merging bank. The results for efficiency suggest that a bank that had raised profitability through a merger was less likely to become a merged bank. Another finding was that a bank with a high baddebt ratio was more likely to participate in a merger as a merged bank.
    Additionally, we divided and assessed the sample to ascertain whether the form of merger and other conditions created differences in the subsequent business performance. First, results suggest that, as forms of merger, business consolidation was more likely to promote corporate downsizing than establishing a holding company. Secondly, analysis of the holding company method performed by dividing sellers and buyers revealed an increase in buyers’ net interest spread and sellers’ rationalization effects. Differences between mergers within an area and between areas included net interest spread growth in the former and active restructuring in the latter.
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