1- Introduction

2- The Model and its simulation results

3- Policy measures of industry and government for cloud computing market

4- Conclusions

References

Abstract

The cloud computing market is rapidly expanding and changing the nature of ICT across all sectors; cloud computing transforms ICT from a tool dependent upon investment and physical ownership to one that can easily make use of outside resources. On the other hand, cloud computing services are being provided not only for simple data storage, but for many purposes through several different service models, such as SaaS (Software as a Service), PaaS (Platform as a Service) and IaaS (Infrastructure as a Service). Due to, among other factors, the nature of its network externalities, the market seems to be gradually shifting to a market with oligopolistic characteristics in which the services are provided by a limited number of big-name firms. In this paper, the impact of the shift of the cloud computing market to a market with oligopolistic characteristics on utility-based social welfare is quantitatively estimated and analyzed utilizing DSGE (Dynamic Stochastic General Equilibrium) model-based simulation. The main objectives of the paper, rather than to ascertain the exact change of utility-based social welfare, are (1) to determine whether there is a (realistic) shifting path of macroeconomic variables in Japan’s case, under the shift and (2) to illustrate the dynamic interaction of the macroeconomic variables. Utility-based social welfare is chosen, because for the purpose of evaluating policy measures it would be more suitable than GDP. Also, several kinds of policy measures for the sound development of the cloud computing market that the industry and government can take are discussed in a sense related to a market with oligopolistic characteristics.

Cloud computing and its market in Japan

In September 2011, the U.S. Department of Commerce’s (U.S. DOC) National Institute of Standards and Technology (NIST) released “The NIST Definition of Cloud Computing” and identified five important aspects of cloud computing, namely (1) on-demand self-service, (2) broad network access, (3) resource pooling, (4) rapid elasticity and (5) measured service.1 Given these characteristics, firms that choose to introduce cloud computing can operate on a platform provided by external cloudservice providers and accessed through digital networks. Because their operations were previously performed with their own hardware, software and data, all of which were self-owned, operated and maintained, an increase in efficiency is expected across all ICT-using sectors. As for cost, fixed costs, most of which have to be paid initially (initial cost), can be transformed to variable costs on a pay-as-you-go basis, and thus, financial efficiency is also expected to improve. In this respect, a firm that introduces cloud computing may save more, because if it procures its own system, it is likely that the specifications of that system would match the expected maximum workload in its product life of use rather than the specifications needed at the time of procurement. Moreover, because cloud computing lowers market entry costs, the number of market entrants is expected to increase. This would be especially true for Small and Medium-sized Enterprises (SMEs).2 3 Table 1 tabulates some of the published market forecasts related to cloud computing in Japan. The cloud computing market still occupies a small portion of the ICT market. However, it is expected to grow rapidly in the near future. According to the MM Research Institute, from 2016 through 2021, the domestic cloud market is expected to grow at the annual compounded rate of 20.6%, while ICT investment is expected to remain at the same level.

1- Introduction

2- Theory and hypotheses

3- Methodology

4- Results

5- Discussion

6- Conclusion

References

Abstract

Little research examines the mechanisms for the relationship between expatriate utilization and subsidiary performance. Building on the knowledge-based view of the firm, we propose a multi-stage mediation model to explain how expatriate staffing promotes subsidiary financial performance. Our results underscore that expatriate utilization has an indirect, mediated effect on subsidiary financial performance through its links with subsidiaries’ knowledge creation and product performance. Adopting a moderated mediation approach, we also find that the indirect relationship between expatriate utilization and subsidiary product performance via subsidiary knowledge creation is strengthened by the context of transnational strategy as a moderating contingency.

Introduction

Access to distinctive knowledge assets transferred from a parent firm to its subsidiaries has traditionally been considered a key requirement to overcome liabilities of foreignness in foreign markets (Dunning, 1980; Kogut & Zander, 1993; Zaheer, 1995). A more recent view of MNCs has highlighted the importance of recognizing dispersed knowledge sources in an MNC, orchestrating knowledge flows from subsidiaries as well as headquarters (HQ) and leveraging such knowledge across an MNC network (Bartlett & Ghoshal, 1989; Ghoshal & Bartlett, 1988). According to this view, the ability of a subsidiary to create valuable and unique knowledge assets – not just to harness knowledge transferred from its parent firm – is a core part of the subsidiary-specific advantages that enable the subsidiary to perform effectively in the local market (Rugman & Verbeke, 2001). Thus, identifying the potential sequential processes through which a subsidiary creates valuable knowledge is increasingly important in enhancing the sustained competitive advantage of the entire MNC (Colakoglu, Yamao, & Lepak, 2014; Fang, Jiang, Makino, & Beamish, 2010). While the significance of understanding the knowledge creation capability of a subsidiary has been widely acknowledged in the MNC literature, relatively few empirical studies have been conducted in this line of enquiry (Andersson, Björkman, & Forsgren, 2005; Belderbos & Heijltjes, 2005; Colakoglu et al., 2014). First, with regard to antecedents to subsidiary knowledge creation, research has suggested that external knowledge flows to a subsidiary are a key factor enhancing the knowledge creation capability of the subsidiary, alongside other factors that facilitate the utilization of the sourced knowledge in the knowledge creation process (Almeida & Phene, 2004; Andersson et al., 2005; Colakoglu et al., 2014; Phene & Almeida, 2008). However, empirical studies did not fully support this view as they found that only external local knowledge inflows are conducive to subsidiary knowledge creation (e.g., Colakoglu et al., 2014; Phene & Almeida, 2008). It is unclear whether and how knowledge inflows from an MNC network contribute to subsidiary knowledge creation.

1- Introduction

2- Method

3- Results

4- Discussion

References

Abstract

The purpose of this study was to investigate differences in personality traits among violent, theft, and illegal drug use criminals, comparing them with normal adults. Inmates (N = 645) and normal adults (N = 4546) in Japan responded to a questionnaire, including the Big Five personality traits. Results indicated that violent criminals tended to show lower Agreeableness and higher Extraversion than other criminals. Theft criminals tended to display low Conscientiousness. Illegal drug use criminals showed higher Extraversion and Openness. Inmates tended to show higher Extraversion, Agreeableness, Openness, and Conscientiousness than normal adults. Characteristics of personality traits of criminals were discussed.

Introduction

There is a certain number of criminals who are imprisoned again after completing their jail terms and getting out of prison. For example, in the United States, a study of offenders, who were released from prison after serving a sentence of imprisonment in 2005, reported that 49.3% of offenders were rearrested within 8 years (Hunt & Dumville, 2016). In Japan, among those who were released from prison in 2006, the ratio who became inmates again, within 10 years, was 47.6% (Research and Training Institute, Ministry of Justice, Japan, 2016). Taking the above fact into consideration, how The Ministry of Justice, Japan, will prevent the repetition of crimes is a major challenge for the construction of a society where people can live safely in peace. There are various factors involved in committing a crime; however, to prevent re-offending, it is necessary to take an effective approach to each individual’s problem, as well as to give guidance and support to overcome their problems. Therefore, Japanese prisons are seeking to enhance effective treatment based on research, according to individual offender’s characteristics. This study examines personality characteristics of criminals for each type of offense, comparing their personality traits with normal adults. Personality traits play an important role to understand the addictive nature and genetic factors of criminals because of their stability across the lifespan and relationships with genes and the central nervous system (Miller, Lynam, & Leukefeld, 2003). Many psychologists now agree that the Big Five personality traits (Goldberg, 1990; McCrae & John, 1992) constitute an important overall personality structure of an individual’s personality. The Big Five personality traits represent Openness (e.g., intellectual curiosity and creativity), Conscientiousness (e.g., orderliness and persistence), Extraversion (e.g., sociality and positive affect), Agreeableness (e.g., cooperation and trust), and Neuroticism (e.g., anxiety, depression, and emotional instability), and their scores are relatively stable across the life span (Roberts & DelVecchio, 2000). The five-dimension structure is found across different cultures (e.g., McCrae, Terracciano, & 78 Members of the Personality Profiles of Cultures Project, 2005) and a behavioral genetic study also supports them (Yamagata et al., 2006). The Big Five personality traits link to antisocial behaviors. Largescale longitudinal studies in Estonia (Mõttus, Guljajev, Allik, Laidra, & Pullmann, 2012) and in the United Kingdom (O’Riordan & O’Connell, 2014) showed that oncoming antisocial behaviors are significantly affected by low Agreeableness and Conscientiousness, and high Neuroticism. Meta-analytic research, aggregating 15 studies (Miller & Lynam, 2001) and 30 studies (Jones, Miller, & Lynam, 2011), also concluded that low Agreeableness and Conscientiousness, and high Neuroticism predicts antisocial behaviors.

Research has indicated that human morality is associated with cognitive ability. However, morality is not a unified concept but rather is a multi-faceted concept. Moral Foundation Theory suggests that human beings have at least five innate moral foundations: Care/Injury, Fairness/Deception, Loyalty/Betrayal, Authority/Subversion, and Sacred/Fallen. The present study aimed to investigate the associations between these moral values and cognitive ability. A large-scale cross-sectional survey was conducted online, which was completed by a total of 4863 Japanese adults (2922 females, 1935 males, and 6 “other;” Mage = 48.78, SDage = 10.93, range 20–70). Correlation and multiple regression analyses revealed that cognitive ability was positively linked to Care/Injury, Fairness/Deception, and Sacred/Fallen. Notably, the positive associations of cognitive ability with Loyalty/ Betrayal and Authority/Subversion were statistically significant only for people below the age of approximately 50. These findings indicate that although moral foundations are based on emotions and intuitions, they are substantially associated with cognitive ability. In addition, the positive direction of associations of cognitive ability with Loyalty/Betrayal and Authority/Subversion was inconsistent with previous findings in Western countries, which suggests that these associations are culture-dependent.

Introduction

Human beings are social animals; we go about our everyday lives establishing social relationships. This renders it necessary for us to behave morally in society (de Waal, 1996). There are broad individual differences in moral behaviors, which can be well explained by variability in moral values. Moral Foundations Theory (MFT) suggests that we inherently have five broad intuitive moral foundations (Graham et al., 2011, 2013; Graham, Haidt, & Nosek, 2009). The five moral foundations are as follows: Care/Injury, Fairness/Deception, Loyalty/ Betrayal, Authority/Subversion, and Sacred/Fallen. Care/Injury is represented by virtues of warm-heartedness, humaneness, and nurturance. Fairness/Deception refers to ideas of justice, rights, and impartiality. Care/Injury and Fairness/Deception are called individualizing foundations, which include all that are needed to support the individual-focused contractual approaches to society often used in enlightenment ethics and are highly associated with liberal ethics (Graham et al., 2009, 2011). Loyalty/Betrayal reflects trueness, patriotism, and self-abnegation for one’s group members. Authority/Subversion represents deference to legitimate power, authority, and respect for traditions. Sacred/Fallen denotes the abhorrence of disgusting things and contamination. The latter three foundations are referred to as binding foundations, which are linked to all that binds people together into larger groups and institutions (Graham et al., 2009, 2011). These foundations are innate and are related to moral-related emotions; MFT holds that human beings usually rely on their moral intuitions based on the five foundations in determining moral judgements (Graham et al., 2009, 2011). Although these foundations are intuitive and are related to emotion, recent research has investigated and shown the associations between the main moral foundations and cognitive ability.

This paper presents a description of testing procedure and results of the LEAP-GWU-2015, and an investigation of the effect of the radial gravity field in centrifuge modelling. Dynamic responses of two models are compared. One had a planar surface with a 5° slope relative to the base of the container; the other had a curved surface to maintain a constant slope angle with respect to the radial g-field. For the centrifuge tests employed in this study, the slope and base excitation are in the tangential direction to spinning centrifuge. Results show that spikes in acceleration records due to cyclic mobility associated with lateral displacements appeared on both models. However, for the plane surface model, acceleration spikes in the negative (upslope) direction are more prominent and the residual downslope ground deformation was larger. Larger lateral displacement was observed in the plane model, while surface displacements in the curved model are smaller and uniform along the length of the model. For the plane model, the radial gravity acting near the slope top is almost constant and gradually increases towards the slope toe which causes a net increase in effective slope angle. Curving the model ground surface is recognized as leading to uniform lateral displacements along the length of the model surface.

Introduction

The goal of this study is to visualize and evaluate the effect of radial gravity for two well-defined sloping model tests. The tests were part of the LEAP-GWU-2015 project [1]. A series of centrifuge model testing was conducted under the specific model setup provided by the organizer. The geotechnical centrifuge employed in this study is the one in the Disaster Prevention Research Institute, Kyoto University (DPRI-KU), in which the longer side of a sand box is placed tangential to the arm rotation circle. Firstly, we describe the model preparation procedure and specifications of the sensors for future references. Secondly, results of the two model tests are compared to illustrate the effect of radial gravity. In centrifuge model testing, it is a physical restriction that the centrifugal acceleration or gravity field in a model ground is radial. Because variation of the centrifugal acceleration on the surface is small when the arm length is large, the effect is usually assumed to be minor [2]. Under such a condition, the effect is usually ignored and results are interpreted as if the prototype ground surface is flat. However, if the arm length is short a planer surface simulates a curved surface in prototype. The effect may be more prominent under extreme conditions such as liquefaction. To conclude the VELACS project, Scott [4] emphasized that the issue of quality control in physical modelling had to be clarified before moving on to a next step. This is still true after 20 years. Although the effect of the radial gravity is well known among physical modelers, these effects have been hardly reported and kept abstract. This study discusses these effects in particular to dynamic problems with welldefined saturated sloping ground, and finally confirms the importance of curving the ground surface in centrifuge modelling.

1- Introduction

2- Literature review and hypothesis development

3- Empirical approach

4- Empirical results

5- Robustness check

6- Conclusion

References

Abstract

We take advantage of the introduction phase of business risk disclosure in Japan as a natural experiment to examine the causal effects of the disclosure on firm risk. In contrast to risk factor disclosure that appeared partly in the Management Discussion and Analysis section (MD&A) in the United States, Japanese business risk disclosure is a new, independent disclosure regime, which began in the fiscal year ending March 2004.We find that the introduction of mandatory business risk disclosure has a negative impact on total risk. This suggests that an increase in business risk disclosure contributes to reduce a firm’s cost of capital, which is contrary to the results found in previous research. However, we also find that there is a positive relationship across firms and years after the inception between the amount of business risk disclosure and total risk, indicating that mandatory business risk disclosure has an impact on increasing investors’ assessment of firm risk. Although the two effects offset each other, the effects of enhanced disclosure of business risks on reducing the cost of capital exceed the effects on increasing investors’ assessment of firm risk.

Introduction

We empirically examine the economic effects of textual disclosure focusing on mandatory business risk disclosure. We focus on the introduction phase of business risk disclosure in Japan to capture the exogenous variation in the supply of public information to identify whether mandatory business risk disclosure increases or decreases investors’ assessment of firm risk. Business risk disclosure in Japan is intended to enable investors to assess a firm’s business risk (FSA, 2003), and it is equivalent to the risk factors disclosure included in the 10-K filings in the United States. However, it is noteworthy that business risks appeared partly in the Management Discussion and Analysis section (MD&A) in the United States before the introduction of risk factors disclosures (e.g., comments letter 9 on proposed rules, SEC 1999). In contrast, Japanese business risk disclosure is a new, independent disclosure regime, which began in the fiscal year ending March 2004. Thus, we take advantage of the introduction of business risk disclosure in Japan as a natural experiment to examine the causal effects of mandatory business risk disclosure on firm risk. There is an additional benefit from focusing on the new business risk disclosure rule in Japan. Because there was little information about the content, format, and writing style accompanying the introduction of the new regulations, it would seem unreasonable to expect that managers would only disclose boilerplate information or industry-wide or macroeconomic risk factors in their mandatory business risk disclosure, at least initially. In this sense, we would expect more accurate experiment about the effects of business risk disclosures by focusing on the introduction phase in Japan.

Purpose: This study examines the link between corporate social performance (CSP) and the cost of capital of Japanese firms in 2008–2013, considering the influences of banking relationships and ownership structure. Design/methodology/approach: It examines the relation between CSP and the cost of capital in terms of the cost of debt, cost of equity, and weighted average cost of capital, using a composite CSP measure based on stakeholder relationships. A regression model is adopted, controlling for bank dependency, ownership structure, and firm-specific attributes. Findings: Institutional ownership influences the CSP–cost of equity relation and reduces the cost of equity, while CSP is perceived by debtors as not information-mitigating for the observed period. For 2008–2010, the relation between CSP and bank dependency increases the cost of debt; however, the positive influence of bank dependency on the cost of debt dilutes during 2010–2013 as the shift to a more market-oriented financial market in Japan occurs. Practical implications: Although bank borrowing is important, especially for small firms, non-financial disclosure makes external financing more flexible. Institutional investors concerned about the non-financial aspects of business therefore play an important role in mitigating the information asymmetry that exists in the capital market. Originality/value: This study extends research on the CSP–cost of capital link by considering structural changes in financial systems (e.g., capital market perception of CSP and banks as delegated monitors).

Introduction

Since the 1970s, numerous studies have investigated the link between corporate social responsibility (CSR) and financial performance. A firm’s CSR strategy is recognized as a determinant of its long-term success in terms of competitive advantage, risk management, and sustainability. Through financial liberalization and globalization, the relationship between the financial market’s perception of CSR and corporate managers’ decisions on financing has become increasingly important for the future development and sustainability of business. The extent to which CSR affects the cost of capital has become a dominant theme in CSR research over the past decade. From a theoretical perspective, a corporate strategy that sufficiently considers the non-financial aspects of the business as well as conflicts among stakeholders reduces business risk and mitigates the information asymmetry faced by lenders and investors in the financial market (Perrini et al., 2011). Thus, high corporate social performance (CSP) could reduce the agency costs faced by a company that pursues external financing. From a practical perspective, the market perception of CSP may incentivize the company to initiate CSR in order to distinguish effective CSR practices from formative CSR practices and to promote non-financial disclosure (Carroll and Shabana, 2010). From the viewpoint of information asymmetry, institutional investors may prefer high CSP firms to reduce information costs, while banks may accumulate firm-specific information based on relationship lending rather than select high CSP borrowers. Further, ownership structure and the banking relationship (dependency on bank borrowing or bank dependency hereafter) could influence the link between CSP and the firm’s cost of capital differently (Roberts and Yuan, 2010; Goss and Roberts, 2011). Based on the foregoing, this study explores how CSP in terms of CSR-related non-financial information affects the cost of capital, explicitly considering the influence of bank dependency and ownership structure, in a bank-centered financial market shifting to a more market-oriented system. Specifically, this study examines the relation between CSP and the cost of capital in terms of the cost of debt capital (cost of debt hereafter), the cost of equity capital (cost of equity hereafter), and the weighted average cost of capital (WACC) as a comprehensive cost of capital. The contributions of this study to the body of knowledge on this topic are threefold.

Introduction Among developing countries, China is the largest recipient of foreign direct investment (FDI) and has the largest number of employees who work for foreign companies (UNCTAD, 2010). In 2004, approximately 24 million workers (3% of China’s total employment) were employed by foreign companies in China (UNCTAD, 2004). Japanese companies continue to benefit from China’s growth and remain one of the leading investors in China, accounting for 6.5% of Japan’s total FDI in 2015 (JETRO, 2016b). In response to the yen’s appreciation against the dollar following the 1985 Plaza Accord, Japanese investment in China has shown a remarkable increase: it accounted for 6.0% of the total effective FDI in 2013 and Japan became China’s third largest source of foreign capital, following Hong Kong and Singapore (JETRO, 2016a). The number of Japanese companies located in China at the end of 2012 was 23,094, which accounted for the highest share (7.9%) of total foreign companies located in China (CJCCI, 2016). Similarly, 1.62 million employees worked for Japanese companies in China in 2015, which was 40.5% of total employees of Japanese companies across Asia (METI, 2016). However, foreign companies in China face a major problem: they must determine how to manage and retain the local employees. Japanese companies have significant problems in this regard, both in terms of high employee turnover and of competing for the best employees. Surveys have indicated that Japanese companies in China rarely if ever rank among the most popular employers, and are even frequently listed among foreign companies that people least want to work for (Zhang, 2003). These difficulties may have to do with a decrease in their rank and share in the total effective FDI in this country, from third (6.0%) in 2013 to fifth (2.5%) in 2015. During this period they were outstripped by both Taiwan and Korea (JETRO, 2016a). Given this situation, it is necessary to determine how Japanese companies can reduce their employee turnover rates or attract the best employees in China. To meet these goals, this study analyzes antecedents of organizational commitment (OC) and how those antecedents differ between university graduates and other workers who are employed by Japanese manufacturing firms in China.

In recent years, working conditions have been changing, particularly due to a global shift from a manufacturing economy to a service and knowledge economy with advanced information technology. With these changes, employees are more likely to feel pressure and stress at work [1]. In addition, a manager would no longer be able to design a job for employees considering their needs and skills [1]. Accordingly, an important role of employees is to design their own job or work environment [1–3]. Japanese companies have also adopted this new trend, as many companies in Japan expect their employees to have more responsibility and autonomy for improving their own employability [4, 5]. The field of occupational health has started to pay increased attention to the concept of job crafting, i.e., an idea of employee-initiated job design/redesign. Wrezesniewski and Dutton [6] have defined job crafting as “the physical and cognitive change individuals make in the task or relational boundaries of their work”, which involves changing work task, changing interpersonal relationship at work, and changing cognitions about work. By using job-crafting behaviors, employees design and improve their work and social environment in workplace by themselves [6, 7]. A further classification of job crafting has been made based on dimensions of work and work environment on which job crafting focuses, such as types of job demands and job resources based on the Job Demands-Resources (JD-R) model [7–9]. Job demands refer to physical, psychological, social, or organizational aspects of the job that require sustained physical or psychological efforts and skills and are associated with certain physical or psychological costs [8]. Recently, Van den Broeck et al. [10] distinguished between challenging job demands and hindering job demands because they have different associations with outcomes (e.g., work engagement, burnout). Challenging job demands, such as time pressure and workload, stimulate employee motivation because employees feel satisfaction from accomplishing challenging tasks, while hindering job demands, such as resource inadequacy, role ambiguity, and interpersonal conflict, have a negative effect on the mental or physical health employees [10, 11]. Job resources are physical, social, or organizational aspects of the job that help individuals achieve their working goals, stimulate personal growth, learning, and development, or reduce job demands or associated physical or psychological costs [8]. Using this refined classification of job demands and resources at work, Tims et al. [7] empirically categorized job crafting into the following four factors: (1) increasing structural job resources (e.g., autonomy, variety, and opportunity for development), (2) increasing social job resources (e.g., social support, supervisory coaching and feedback), (3) increasing challenging job demands (e.g., new project, learning new things), and (4) decreasing hindering job demands (e.g., fewer cognitive demands or stressful relationships).

Although the production and application of iron and steel were delayed by about 100 years in Japan compared with those in Europe and the US, Japan is one of the most advanced countries in both steel production and application at present. This was made possible because of extensive R&D activities on technologies for production of steel, steel materials, and various structural steel systems. Since Japan is one of the most seismically active areas in the world, steel structures have played an important role in securing safety against frequent and large earthquakes that have left tremendous damage and human losses in the past. Japan domestically consumes about 50 million tons of steel every year, and approximately 45% of the steel is used for the construction market. Although Japan has been reaching an economically mature stage, the Japanese industry of steel and steel structures may expect further growth in steel consumption for buildings and infrastructure because of strong current demands for renovations, renewals, and even urban redevelopment. In this paper, starting with the overview of steel buildings in Japan, development of some of the advanced steel materials including high-strength steels and seismic-resistant steels is outlined in detail with their backgrounds. Some of the advancements are motivated by frequent large earthquakes; therefore, the relations with seismic design are stressed.

Recently, substantial changes in corporate governance arrangement have been seen across countries. Corporate governance reforms have been enacted in most of developed and emerging countries (Kim and Lu, 2013). Institutional investors have become major players not just in the U.S.; their role is rapidly growing in all developed and emerging market countries (Khorana et al., 2005). Japan is one of the countries that experienced the most drastic changes in corporate governance. It has long been argued that corporate governance practices commonly found in Japan differ markedly from those in the U.S. In the U.S., in the arena of corporate control, institutional investors and independent boards of directors are arguably important governance mechanisms. In contrast, corporate governance arrangement in Japan is conventionally considered as bank centered (Aoki and Patrick, 1994). However, following the process of financial deregulation and the collapse of the Japanese bubble economy in the early 1990s, the bank-centered corporate governance system has been gradually transformed into the market-oriented system as commonly found in the US (Hoshi and Kashyap, 2001; Aoki et al., 2007). Figure 1 shows the changes in the ownership structure of Japanese firms. Panel 1 shows the 25, 50 (median), and 75 percentile values for main bank ownership during the period from 1990 to 2013. Main bank ownership is used as a proxy for the strength of a firm’s ties with its main bank in previous papers (for example, Gibson, 1995; Hori et al., 2006). Before the late 1990s, the extent of main bank ownership in Japan was high just below regulatory ceiling and stable. 1 However, after the late 1990s, main bank ownership began to decline dramatically, with the mean (median) bank ownership decreasing from 4.0% (4.6%) in 1998 to 2.4% (2.5%) in 2005. In addition, the spread between the 75 and 25 percentile values increased from 1.6% in 1998 to 4.3% in 2005, implying that bank-firm relationship was diversified. In contrast to declines in main bank ownership, foreign institutional ownership began to increase sharply during the same period, from a mean (median) of 5.8% (3.2%) in 1998 to 14.0% (11.0%) in 2005. Similar to main bank ownership, the spread between the 75 and 25 percentile values increased from 7.7% in 1998 to 16.5% in 2005 as is shown in Panel 2. Firms with large market capitalization, high liquidity and well familiarity through oversee business are preferred by foreign investors, while firms with modest market capitalization and low liquidity are remaining low foreign institutional ownership (Miyajima and Kuroki, 2007; Miyajima and Ogawa, 2016).

Increasingly, corporations are expected to be socially and environmentally responsible within their communities (Eweje, 2006). An increase in awareness and sensitivity toward social and environmental issues is exacerbating the situation, and demands from various stakeholders are pressuring corporations to do more for the society (Eweje and Sakaki, 2015; Dobele et al., 2014). Corporate social responsibility (CSR) is “a concept whereby companies integrate social and environmental concerns in their business operations and their interaction with stakeholders on a voluntary basis” (Commission of the European Communities, 2001, p. 6). This study views CSR as an essential element of an organization’s core business and not just as a strategy to gain legitimacy or manage reputation (Arjalie`s and Mundy, 2013). This approach advocates that CSR embeds socially and environmentally responsible actions throughout the organization to enhance long-term value (Arjalie`s and Mundy, 2013; Moon, 2007). CSR is an increasingly essential concept for largesized enterprises and small- and medium-sized enterprises (SMEs) (Tantalo et al., 2012; Arevalo and Aravind, 2011; Sweeney, 2007; Abreu et al., 2005; Longo et al., 2005). Attention to CSR has intensified since 2003 in Japan (Fukukawa and Teramoto, 2009). Many large Japanese corporations face CSR issues in their day-to-day work and have designated managers as heads of CSR units responsible for the development and implementation of CSR initiatives and practices (Eweje and Sakaki, 2015). SMEs[1] in Japan have also integrated CSR as a core component of business. Haron et al. (2015) indicate that SMEs value integrity, ethics and social responsibility highly. Successful SMEs continue to uphold the ethical principle of always prioritizing the needs of the customer. SMEs in Japan also emphasize the preservation of traditional culture, contribution to society and value expert advice on ways to improve business (Haron et al., 2015). The purpose of this study is to explore how management control systems (MCSs) can support the translation of CSR into CSR actions using a case study of a SME in Japan. The case is based on an interview with a CEO of a Japanese Sake brewery. This paper contributes to the discussion on CSR and MCSs in Japan and how CSR activities are integrated into SMEs through MCSs. CSR has become part of daily business in Japanese SMEs; however, the role of MCSs in the implementation of CSR activities in SMEs in Japan has not been clarified. Thus, this study is timely.

Firms have good reasons to disclose private information. The benefits of disclosure involve lower cost of capital, higher stock valuation and greater ability to raise funds, which altogether promote firm growth (Pownall and Waymire, 1989; Diamond and Verrecchia, 1991; Lang and Lundholm, 1993; Botosan, 1997; Francis et al., 2005). However, concerns related to product market competition may prevent firms from disclosing their private information (Verrecchia, 1983; Darrough and Stoughton, 1990; Wagenhofer, 1990; Newman and Sansing, 1993). Attitudes toward disclosure also vary across shareholders. Institutional investors require accurate and timely information to allocate their funds more efficiently (Healy et al., 1999; Bushee and NOE, 2000; Ajinkya et al., 2005). In contrast, controlling blockholders prefer fewer disclosures since their longer horizons imply that they have little to gain from a prompt reevaluation of their shares. Furthermore, Sengupta (2004) argues that controlling blockholders have greater access to the firm’s private information and would prefer to maintain their informational advantage by discouraging timely and detailed public disclosures. Empirical studies based on US firms indicate that quality of disclosure is linked to firms’ ownership structure. Using management earnings forecasts as a means for firms to convey private information, Ajinkya et al. (2005) find that institutional ownership is associated with more accurate and less biased disclosures. While their focus is on the role of internal governance structures, Karamanou and Vafeas (2005) show that firms with high institutional ownership are more likely to issue management earnings forecasts that are also more precise, whereas insider ownership is associated with fewer and less precise forecasts. Both studies control for the endogeneity of ownership. However, their variable of interest may not accurately capture firms’ disclosure quality. In an environment where forecasts are voluntary, firms can freely choose whether and when to issue forecasts. Accordingly, the decision not to issue forecasts does not necessarily indicate poor disclosure, as firms can choose not to issue forecasts simply because they have no incentive to do so. Since prior studies use non-issuers as the control group, the question of whether and how governance structure is associated with the decision to disclose management’s private information has not been fully resolved.