corporate strongfinancestrong and human resource management.pdf

RIETI Discussion Paper Series 04-E-027 Corporate Finance and Human Resource Management ABE Masahiro RIETI HOSHI Takeo RIETI The Research Institute of Economy, Trade and Industry http://www.rieti.go.jp/en/ RIETI Discussion Paper Series 04-E-027 Corporate Finance and Human Resource Management Masahiro Abe Department of Economics, Dokkyo University and RIETI and Takeo Hoshi Graduate School of International Relations and Pacific Studies, University of California, San Diego, NBER, and RIETI February 2004 Revised: May 2004 ABSTRACT Corporate governance can be defined to be an institution that constrains relations between corporate managers and various stakeholders, including shareholders, creditors, workers, suppliers, and customers. Under this broad definition, corporate governance is a system of various sub-systems that are complementary to one another. This paper focuses on two sub- systems of the Japanese corporate governance: one on corporate finance and another on human resource management. After briefly documenting the characteristics of the Japanese corporate governance in these two sub-systems, the paper discusses how each sub-system has been going through substantial changes in rece