Pokarier, Christopher --- "Open to Being Closed? Foreign Control and Adaptive Efficiency in Japanese Corporate Governance" [2008] ELECD 389; in Nottage, Luke; Wolff, Leon; Anderson, Kent (eds), "Corporate Governance in the 21st Century" (Edward Elgar Publishing, 2008)

Book Title: Corporate Governance in the 21st Century

Editor(s): Nottage, Luke; Wolff, Leon; Anderson, Kent

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847209238

Section: Chapter 9

Section Title: Open to Being Closed? Foreign Control and Adaptive Efficiency in Japanese Corporate Governance

Author(s): Pokarier, Christopher

Number of pages: 31

Extract:

9. Open to being closed? Foreign control
and adaptive efficiency in Japanese
corporate governance
Christopher Pokarier
How open is Japan to foreigners taking control of Japanese enterprises and
what does it say about this book's theme of the `gradual transformation' of
Japan's corporate governance? Japan is formally very open to foreign direct
investment (FDI), excepting certain, perhaps increasingly, `sensitive' sectors.
The Japanese Government seeks to have inbound FDI double to about 5 per
cent of GDP by the end of 2010. Realisation of this objective is likely to entail
more corporate control events involving foreign acquirers. While greenfield
investments are occurring in some sectors, in many others FDI typically takes
the form of acquisitions of existing enterprises, given the maturity of Japan's
economy (ACCJ, 2003). In 2008 this disconcerts few in economies such as the
United Kingdom and Australia. Yet, in the Japanese business and policy zeit-
geist of 2008, widespread ambivalence about the foreign control of Japanese
firms and infrastructure can be readily discerned. As explored elsewhere in
this volume, notably in Chapters 7 and 8, recent corporate law and regulatory
developments give firms considerable latitude to build protections against
unwelcome control events. While provisions are not directed exclusively at
foreign investors, and were indeed made topical by several contentious domes-
tic hostile takeover bids, the explicit rationale of many of the anti-takeover
defences put in place by firms has been the potential threat of a hostile foreign
bid.
Yet since the late 1990s there ...