What is it about?

As the Japanese economy languished and foreign share ownership increased in the 1990s, government and industry leaders called for a shift toward U.S.-style capitalism. They wanted companies to cater more to shareholders and less to "stakeholders," such as workers, business partners, and the local community. Ultimately, however, they reformed Japanese corporate governance more in form than in practice.

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Why is it important?

This article addresses one of the most central questions about contemporary capitalism: Can international shareholders force national governments and domestic companies to cater to them? The article finds that international shareholders exert considerable pressure on domestic institutions, yet governments and firms retain leeway in how they respond to these pressures.


Some American leaders are questioning the U.S. shareholder model and calling for reforms to shift it back toward a stakeholder model - yet Japanese reformers are pressing in the opposite direction. This is particularly puzzling because scholarly studies of the core features of the shareholder model - such as stock options, share buybacks, mergers and acquisitions, and outside directors - do not find evidence that these features improve corporate performance. In short, Japan has been attempting to emulate a model that has not proven successful in its country of origin, the United States.

Steven Vogel
University of California, Berkeley

Read the Original

This page is a summary of: Japan’s Ambivalent Pursuit of Shareholder Capitalism, Politics & Society, February 2019, SAGE Publications,
DOI: 10.1177/0032329218825160.
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