Financial Structure of Japanese Firms: Empirical Analysis of Long-term Trends for ROE

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  • 白田 佳子
    法政大学イノベーション・マネジメント研究センター客員研究員

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  • ROEの長期観察によるわが国企業の財務体質の実態解明
  • ROE ノ チョウキ カンサツ ニ ヨル ワガクニ キギョウ ノ ザイム タイシツ ノ ジッタイ カイメイ

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<p>According to the Final Report of the Ito Review “Competitiveness and Incentives for Sustainable Growth: Building Favorable Relationships between Companies and Investors” Project announced in August 2014, return on equity of Japanese firms is lower than that of other countries. And Japanese firms responded to the 2014 questionnaire of The Life Insurance Association of Japan that they had to increase their ROE ratio. It should be mentioned that ROE is a very tricky financial ratio because it cannot be calculated in some kinds of firms, such as those in insolvency. And ROE cannot be compared country-to-country because the structure of owner's equity is different in each country. In this research, we attempt to analyze tendencies in the financial structure of Japanese firms while also paying attention to changes in the economic environment. The purpose of our research is to confirm whether ROE is a suitable financial index to measure actual return of firms. For our research, we analyzed all listed firms in Japan for 42 years between 1971 and 2013. We rated all firms in each year and analyzed ROE and the original financial number in each rating.</p>

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