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Yoshiro Miwa & J. Mark Ramseyer, Asking the Wrong Question: Changes of Governance in Historical Perspective?, in Corporate Governance in Context: Corporations, States, and Markets in Europe, Japan, and the US 73 (Klaus J. Hopt et al. eds., 2005).

Abstract: This chapter discusses why the following hypotheses are false: (i) over the past century, Japanese firms have significantly changed the way they govern themselves; (ii) from a governance regime where the state (and banks) played a major role, Japanese firms have shifted to one more closely tied to the market; and (iii) in part because of the way the state intervened in the Japanese economy, Japanese firms long maintained (and still maintain) a variety of badly inefficient governance mechanisms. The chapter proceeds through a series of seven propositions which explain how, over the past century, Japanese firms created the vibrant and wealthy economy that exists today. To facilitate that growth, the government did little more than define and enforce the property rights necessary in any competitive market economy. In this world, firms used the corporate form to generate the funds they needed, and large firms heavily raised those funds through equity. They faced relentlessly competitive capital, product, service, and labour markets. And because they did, the firms that survived have overwhelmingly maintained governance regimes that fit the vagaries of those markets.