Mitigating overinvestment in Japanese zombie firms: the role of foreign ownership and earnings quality

IF 2.3 Q2 BUSINESS, FINANCE

Asian Review of Accounting Pub Date : 2024-01-04 DOI:10.1108/ara-04-2023-0115

Takehide Ishiguro, Akihiro Yamada

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Abstract

Purpose

This study investigates the relationship between foreign ownership, earnings quality and overinvestment in Japanese zombie firms.

Design/methodology/approach

The study makes use of data from Japanese firms listed on the first section of the Tokyo Stock Exchange from 2009 to 2019. The study employs logistic and multinomial logistic models to test whether the overinvestment behavior of zombie firms is mitigated by foreign shareholdings and earnings quality.

Findings

The results show that (1) zombie firms tend to overinvest; (2) an increase in foreign ownership mitigates the overinvestment of zombie firms and (3) the mitigation of zombie firms' overinvestment by foreign ownership is stronger with higher earnings quality.

Originality/value

This study extends the discussion of earnings quality and investment efficiency to the zombie firm setting. Previous studies in accounting suggest that high earnings quality enhances firms' investment efficiency. The findings suggest that both a change in ownership structure and high-quality accounting information are necessary to mitigate the inefficiency of zombie firms.

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缓解日本僵尸企业的过度投资：外资所有权和盈利质量的作用

目的本研究探讨了日本僵尸企业中外资持股比例、盈利质量与过度投资之间的关系。结果研究结果表明：（1）僵尸企业倾向于过度投资；（2）外资持股比例的增加缓解了僵尸企业的过度投资；（3）盈利质量越高，外资持股比例对僵尸企业过度投资的缓解作用越强。以往的会计研究表明，盈利质量高会提高企业的投资效率。研究结果表明，所有权结构的变化和高质量的会计信息都是缓解僵尸企业低效率的必要条件。

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来源期刊

Asian Review of Accounting BUSINESS, FINANCE-

CiteScore

3.20

自引率

25.00%

发文量

期刊介绍： Covering various fields of accounting, Asian Review of Accounting publishes research papers, commentary notes, review papers and practitioner oriented articles that address significant international issues as well as those that focus on Asia Pacific in particular.Coverage includes but is not limited to: -Financial accounting -Managerial accounting -Auditing -Taxation -Accounting information systems -Social and environmental accounting -Accounting education Perspectives or viewpoints arising from regional, national or international focus, a private or public sector information need, or a market-perspective or social and environmental perspective are greatly welcomed. Manuscripts that present viewpoints should address issues of wide interest among accounting scholars internationally and those in Asia Pacific in particular.