To explore how speculative trading influences prices in financial markets, we conduct a laboratory market experiment with speculating investors (who do not collect dividends and trade only for capital gains) and dividend-collecting investors. Moreover, we operate markets at two different levels of money supply. We find that in phases with only speculating investors present (i) price deviations from fundamentals are larger; (ii) prices are more volatile; (iii) mispricing increases with the number of transfers until maturity; and (iv) speculative trading pushes prices upward (downward) when the supply of money is high (low). These results suggest that controlling the money supply can help to stabilize asset prices.

In standard economic theory, rent determines real estate price; however, we hypothesize that in behavioral economics, real estate price affects the rent offered. We conduct laboratory experiments where a real estate market opens before a rental market and examine whether owners’ purchase price influences their rent-offering behavior. We find that the higher the purchase price, the higher the rent offered. We also confirm that higher contracted rents lead to higher prices in subsequent real estate markets. This suggests a positive interaction between real estate prices and rents in the real economy, which can explain the acceleration of price increases often observed in real estate markets.

We experimentally explore how investor decision horizons influence the formation of stock prices. We find that in long-horizon sessions, where investors collect dividends till maturity, prices converge to the fundamental levels derived from dividends through backward induction. In short-horizon sessions, where investors exit the market by receiving the price (not dividends), prices levels and paths become indeterminate and lose dividend anchors; investors tend to form their expectations of future prices by forward, not backward, induction. These laboratory results suggest that investors' short horizons and the consequent difficulty of backward induction are important contributors to the emergence of price bubbles.

<p>本稿では，株主主権が企業経営の効率性に与えるマイナス面を理論的に検討する．特に，企業の競争力の源泉として人的資本を考えた場合，株主の権利を強めることが従業員の人的投資を抑制する可能性（ホールドアップ間題）を考察する．その結果，株主権をある程度抑制することが企業全体の価値を高めることが示される．そして，企業ごとの最適な株主権の水準が，企業の特性（人的投資の企業特殊性，プロジェクトの市場価値等）や企業をとりまく環境（外部労働市場の流動性等）によって決まってくることを論じる．このことは，「株主主権は望ましいか」という問いに対する答えが，国，時代，産業，そして企業のタイプによって変わってくることを意味する．さらには，株主と従業員の長期的関係がホールドアップ問題を解決する可能性も検討する．そして，本稿のモデルの結論は，なぜ日本で株主主権が進まないのかを合理的に説明するとともに，日本のコーポレートガバナンスを考察する上で有益なインプリケーションを提供する．</p>

Purpose - This study sets out to explore questions such as: "Does mission statement matter? If so, in what ways?" Using data on mission statements of 128 large Japanese firms, the paper aims to show that corporate mission has a significant impact on corporate policies that determine employment, board, and financial structures.
Design/methodology/approach - The paper provides evidence that strong-mission firms are more likely to retain incumbent employees, promote managers from within firms, and have less debt and a higher percentage of interlocking shareholdings than weak-mission firms.
Findings - The evidence supports the view that strong-mission firms value their organizational capital and thus tend to adopt policies to preserve it. It also confirms that corporate mission and its embedded policies contribute to better corporate performance. The paper suggests that the effect of explicit corporate mission and its implementation has practical impacts in corporate policies and business outcomes.
Research limitations/implications - The sample is based on firms from Japan. The criteria used to discriminate between strong mission and weak mission firms need further refinement with more rigorous sub-dimensions. In the Japanese context the percentage of inside directors is an important indication of internally promoted managers one might argue that a measure of external pressures (e.g. law, codes, investors, etc.) might be a better one. The small number of cases and the richness of statements need a richer qualitative analysis in the future.
Practical implications - The empirical results provide helpful insight on the organizational behavior of Japanese firms during the long economic downturn from the 1990s to 2000s in Japan and an insight on what to do in view of the challenges facing Japanese firms.
Originality/value - The paper presents a model that clarifies the role of mission statement. The extensive literature review includes a diverse set of papers on the role of mission statement. The empirical results suggest how strong Japanese corporate mission, expressed in mission statements, might have impact on corporate outcomes through the formation and utilization of Monozukuri.

This paper proposes an implicit control mechanism of managers inside the firm. We argue that the need to motivate workers may make it beneficial for a self-interested, short-sighted manager to pursue the long-term viability of a firm. When the firm is in a stable environment, this implicit control mechanism may not contradict shareholder value maximization. However, when the firm needs restructuring, this mechanism diminishes firm value. We discuss when external governance is desirable, and when it is not. Our model also offers economic explanations for some related issues in managerial behavior, such as restructuring aversion, survival motive, and excessive risk aversion. J. Japanese Int. Economies 21 (3) (2007) 324-335. © 2006 Elsevier Inc. All rights reserved.

We experimentally explore how investor decision horizons influence the formation of stock prices. We find that in long-horizon sessions, where investors collect dividends till maturity, prices converge to the fundamental levels derived from dividends through backward induction. In short-horizon sessions, where investors exit the market by receiving the price (not dividends), price levels and paths become indeterminate and lose dividend anchors; investors tend to form their expectations of future prices by forward, not backward, induction. These laboratory results suggest that investors' short horizons and the consequent difficulty of backward induction are important contributors to the emergence of price bubbles. © 2007 Elsevier B.V. All rights reserved.

<p>本稿の目的は，これまで日本企業にユニークな特性と理解されてきたメインバンクの介入によるコーポレート・ガバナンスの機能が，1990年代に入っていかに変化しているかを検討する点にある．そのために，本稿では，電機・化学・建設の3部門の上場企業のうち財務危機に陥った企業（2年連続インタレスト・カバレッジ・レシオが1未満の企業）を分析の対象に取り上げ，この財務危機企業に対して，①メインバンクが経営に介人しているか，②メインバンクの介人があった場合，それは企業経営にいかなる変化を引き起こしているかを定量的に検討した．そして，1990年代の財務危機企業に対するメインバンクの介入の分析結果を，これまでメインバンク介人型ガバナンスがもっとも典型的にワークしていたと理解されてきた石油ショック後の期間（1974-82年）の分析結果と比較した．その結果，企業が財務危機に陥った際にメインバンクが経営に介人する確率は，90年代には石油ショック後に比べて大きく低下していること，また，メインバンクが介人したとしても，経営者交代の時期の遅れ，収益の回復の遅れなど，90年代にはその介入の効果が薄れていることを示唆する事実が明らかとなった．</p>

This paper investigates empirically how Japanese firms determine capital structure. I show that a firm's capital structure in Japan can be explained, to some extent, by real factors derived from theories of the capital structure. I also find remarkable results showing that the capital structure of Japanese firms is substantially affected by the institutional and regulatory characteristics of Japanese capital markets. Therefore, I conclude that both real and institutional factors are important determinants of corporate financing decisions in Japan. This result indicates that it is necessary to consider both theories and institutional features in each country to fully understand a firm's capital structure choice. (C) 1999 Academic Press Journal of Economic Literature Classification Numbers: G15, G32, G38.

Baltensperger (1972a, b) proposes the risk-cost hypothesis that banks decide the number of loans by considering the costs arising from diversifiable portfolio risk. Thus, the banks do not minimize operation costs, but total costs including risk costs. This paper examines empirically whether the risk-cost hypothesis is valid, using financial panel data from Japanese banks from 1981 to 1994. Estimating the first-order condition of total cost minimization together with an operation cost function, we find that the hypothesis is supported. Dividing the sample into different types of banks, it is found that the hypothesis is valid for city and regional banks, but not for second regional banks. (C) 1999 Elsevier Science B.V.

"This paper examines the optimal capital structure of the firm when debt has the roles of both ""reducing-free-cash"" and ""reorganization"". Under one reorganization process, we show that the optimal financing policy for the firm is to choose debt seniority structure (between junior and senior debt) as well as to determine the debt level as a whole."

In this paper, we argue that the main bank in Japan acts as a quasi-inside monitor of the firm, delegated by other lenders, and that main bank relationships increase the debt capacity of the firm by reducing the agency cost of debt. On the other hand, firms with high debt ratios will strengthen main bank relationships due to the agency problems associated with high leverage. Thus, the debt ratio and main bank relationships are simultaneously determined and have positive effects on each other. The empirical results we obtain support these hypotheses. J. Japan. Int. Econ. September 1996, 10(3), pp. 250-261. Department of Economics, Kyoto Sangyo University, Kamigamo, Kitaku, Kyoto 603, Japan; and Department of Business Administration and Information, Setsunan University, Ikedanakamachi, Neyagawa, Osaka 572, Japan. (C) 1996 Academic Press.