APEC Report: Corporate Governance Plus Market Development

In 2016,  Europacifica Consulting delivered the case study, Financial Services Sector Reform in Japan, for inclusion in the APEC Economic Policy Report, published in November 2016.

In the case study, we argued that corporate governance was a vital area of potential structural reform in PM Abe’s economic agenda, which at the time had yet to show clear results.  Since then, there have been clear signals of improvement in corporate Japan’s balance sheets and governance practices, as well as a rise in Return on Equity among many of Japan’s largest companies.

Signals of bona fide structural reform are comforting, but we underscore the importance of another of the report’s key arguments; that Koizumi-era reforms in the financial sector did not go far enough in engendering self-sustaining financial market reforms.  Both financial reform and investor education may go further to promote households’ move “from savings to investment”, in other words, a move toward greater household participation in financial markets.

The case study may be found in Annex A of the report.  The case study was also prepublished by Columbia University’s APEC Studies Center as well (link to report).

Presentation at Melbourne Asia Law Centre: Financial Services Sector Reform in Japan

Europacifica Consulting has been assigned a case study by APEC for its 2016 review of structural reform in the services sector, on the financial services sector in Japan.  The objective of the case studies was to elaborate lessons learned from both policy successes and disappointments during historical episodes of structural reform, and we have chosen to focus on late Koizumi-era […]

Why Corporate Governance is Central to Japan’s Growth Strategy

Just to add a few additional points in addition to Nick’s insightful comments–>  Given (a) evidence that productivity in Japan is very strongly influenced by investment-specific technology, and (b) evidence that services sectors in the non-IT sector were “left behind” while manufacturing and IT sectors were able to capitalise on the technology boom, it makes sense to focus efforts on structural reform in the services sector.

Still, as Fukao, Miyagawa and Hisa demonstrated in their 2012 paper,increasing intangible capital alone has proven no indicator of rising TFP in the services sector.  This may explain why policies designed to promote growth via intangible investment in services sector in the early 2000’s were misplaced.

So what are the policy alternatives?  The second TFP paper gives us some key policy ingredients: