A study on the ineffectiveness of Japan’s Stewardship Code (2014) confronted with Japan’s Fair Disclosure Rule (2018)





Abenomics, conflicts of interests, corporate governance


Background: Abenomics is a policy mix that was designed and introduced by the Liberal Dem­ocratic Party (LDP) in Japan. It aims to revive the Japanese economy and has been advocated by Prime Minister Shinzo Abe and his Cabinet since December 2012. Since 1989, Japan has experienced a severe financial crisis and almost 30 years of economic stagnation, known as the “Lost Decades”.

Research purpose: This study examines the ineffectiveness of one of Abenomics’ solutions, Japan’s Stewardship Code (2014), “the Code,” confronted with Japan’s Fair Disclosure Rule (2018). The Code aims to both enhance returns for financial investors and foster the corporate value and sus­tainable growth of investee companies. The purpose of this study is, first, to clarify the relationship between stock prices and earnings-to-price ratios in the Japanese stock market, reflecting the worst performance period of 1989–2018, when stock prices continuously declined. The second is to judge whether it is meaningful or meaningless to carry out the Code from a long-term investors’ perspective.

Methods: I used an approach by Brealey, Myers, and Allen (2008), where a discount dividend model and the net present value of future-growth opportunities are discussed.

Conclusions: I concluded that it would surely be ineffective to carry out the Code in Japan.


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How to Cite

Masuyama, T. (2020). A study on the ineffectiveness of Japan’s Stewardship Code (2014) confronted with Japan’s Fair Disclosure Rule (2018). Studia Prawno-Ekonomiczne, 114, 295–312. https://doi.org/10.26485/SPE/2020/114/16