Earnings informativeness and ownership structure in Japan

Abstract

This paper investigates the association between institutional ownership structures and the quality of earnings information via changes in earnings response coefficients for a sample of Japanese firms during 1990-1998. From these results we can predict that the greater the percentage of institutional shareholders in Japan, the better the quality of earnings information and the higher the foreign ownership; the quality of earnings information is better during Japan's recession period of 1990-1998. However, keiretsu membership percentage is not important for the quality of earnings information in Japan even though firm size, leverage ratio, and growth are important factors in earnings information in Japan.