- 麗澤経済研究 (ISSN:09196706)
- vol.7, no.1, pp.45-61, 1999-03
The question of what is the appropriate way of rewarding shareholders has gained widespread public attention in both Japan and Germany in recent years. Against this background of growing attention, the Japanese and German business and academic communities are addressing themselves to matters of responsiveness to shareholders. While much emphasis is thereby placed on how to change traditional practices in rewarding share-holders, less emphasis is placed on the fundamental question of why both Japanese and German MNEs should change their traditional practices. The aim of this study is to figure out the reasons that necessitate such changes in corporate attitudes among globally focused Japanese and German MNEs. The paper proceeds in the following way: Chapter 1 outlines the main features of responses to shareholders commonly practiced by Japanese and German MNEs vis-a-vis their American counterparts and concludes that there are two basic rewarding models: a unichannel-oriented model and a multichannel-oriented model. It then, explains to what extent the differences observed are claimed to be a result of significant differences in institutional factors (e.g. importance of main bank system, formal and informal network of long-term relationships among the stakeholders, common in both Japanese and German industries). Chapter 2 explores the relations between the ways of rewarding shareholders described above and the internationalization of the MNEs' businesses. Examining the dynamism embedded in the MNEs' international businesses, the paper tries to evaluate a growing importance of the interfirm collaboration for MNEs on one hand, and their increasing exposure to global institutional investors on the other. Referring to the former point, it is explained why MNEs tend to employ interfirm transactions in preference to arm's length transactions and internal organization to secure external resources. However as to the latter point, it explains why MNEs might increasingly tap international capital markets in parallel with their golbalization. Providing a conceptual framework for understanding the mechanisms which transmit the impacts of internationalization on the corporate practices in rewarding shareholders; Chapter 3 first explains how such transmission mechanisms work theoretically and second, investigates under which conditions the expected impacts would actually be transmitted to the end and under which ones, they would not. The study draws three main conclusions: First, internationalization in various respects is considered to be the factor that most probably would bring about a change in corporate practices of rewarding shareholders. Nevertheless, as the survey showed, there might still be some cases in the future in which the multichannel-oriented rewarding model, prevailing in both Japan and Germany, might not fail to fulfill its function. Third, other indirect factors such as institutional changes in money and capital markets are also likely to push both Japanese and German MNEs to change their traditional practices and to be more responsive to shareholders.