ビシュヌ クマル アデ カリ-

This paper empirically investigates the role of the main banks in enhancing earnings quality of their client firms in Japan and unveils some intriguing results. First, equity holdings of the main banks improve earnings quality of their client firms. Second, such shareholdings help attenuate the adverse effect of foreign shareholdings on earnings quality, indicating that the main banks can substitute the monitoring role of foreign shareholders. Third, the effect of institutional, executive and dominant shareholdings on earnings quality disappears when the main banks inject equity, implying that the main banks can significantly reduce agency problem in financial intermediation even in Japan's contemporary financial setup where the market-based monitoring system for firms has been encouraged. Furthermore, the role of the main banks remains significant when the cross-shareholding and stable shareholding are taken into account, suggesting that the equity ownership of the main banks help improve earnings quality through effective monitoring.

This paper examines the effects of the six components of good governance on foreign direct investment (FDI) inflows in 15 Asian economies for the period 1996-2007 using a fixed effect model for panel data with heteroskedasticity corrected standard errors. The study also employs the feasible general least square (FGLS) and Prais-Winstein panel estimation methods in order to check the consistency of the results with the fixed effect model. The empirical results reveal that of the six components of good governance, political stability and absence of violence, government effectiveness, rule of law, and control of corruption are the key determinants of FDI inflows, as they exhibit consistent results under different models. However, the study finds no significant evidence with voice and accountability and regulatory quality in FDI inflows. The study reveals that human capital, infrastructure, lending rate, and GDP growth rate also have a significant influence on FDI inflows. We conclude that a country which can enhance its governance environment in general is likely to attract more foreign direct investment despite offsetting deficiencies in other dimensions of good governance such as voice and accountability and regulatory quality.