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Historically, in Japan, out-of-court corporate restructurings have played a significant role in disciplining managers in the near-absence of hostile takeover activity and shareholder activism. This paper analyzes management turnover in a large sample of Japanese firms that underwent restructurings between 1981 and 2010. I find that restructurings that happen in later stages of financial distress, and those that are not initiated by the firm itself, are more likely to involve management turnover, as are restructurings in which the firm's main business operations are left intact. Furthermore, in restructurings after the reforms around the year 2000, management turnover is more likely to occur if the local potential managerial labor market is substantial. After controlling for firm characteristics and the firm's initial financial condition, it does not appear that management turnover is associated with an improvement in post-restructuring operating performance--in fact, the effect is significantly negative by estimates that address the non-random nature of management turnover. However, for restructurings led by equity funds, management turnover is associated with a more successful turnaround of the firm's performance. These results suggest that equity funds possess the ability to locate and recruit talented outside managers in a thin market for experienced managers.

 

Michael Furchtgott is an economist interested in corporate finance and governance. His current research investigates Japanese corporate restructurings and the behavior of firms and lenders when financial distress arises.

Furchtgott has completed his PhD in economics at the University of California, San Diego, where his research on corporate financial restatements has demonstrated that firms frequently circumvent laws designed to protect investors.

He holds a BA in economics and mathematics from Columbia University.

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Shorenstein APARC
Encina Hall C331
616 Serra Street
Stanford, CA 94304-6055

(650) 724-9747 (650) 723-6530
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Shorenstein Postdoctoral Fellow in Contemporary Asia
FURGHOTT,_Michael_3x4.jpg PhD

Michael Furchtgott is an economist interested in corporate finance and governance. His current research investigates Japanese corporate restructurings and the behavior of firms and lenders when financial distress arises.

Furchtgott has completed his PhD in economics at the University of California, San Diego, where his research on corporate financial restatements has demonstrated that firms frequently circumvent laws designed to protect investors.

He holds a BA in economics and mathematics from Columbia University.

Michael Furchtgott Postdoctoral Fellow in Contemporary Asia Speaker Shorenstein APARC
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In this eleventh session of the Strategic Forum, former senior American and South Korean government officials and other leading experts will discuss current developments in the Korean Peninsula and North Korea policy, the future of the U.S.-South Korean alliance, and a strategic vision for Northeast Asia. The session is hosted by the Korean Studies Program at the Shorenstein Asia-Pacific Research Center, in association with Korea National Diplomatic Academy, a top South Korean think tank.

PARTICIPANTS

United States:

Michael Armacost, Distinguished Fellow, Shorenstein APARC, Stanford University

Karl Eikenberry, Distinguished Fellow, Shorenstein APARC

Siegfried Hecker, Professor, Management Science and Engineering; former co-director, CISAC, Stanford University

Thomas Fingar, Distinghished Fellow, Shorenstein APARC

T.J. Pempel, Professor, Political Science, University of California, Berkeley

Gi-Wook Shin, Professor, Sociology; Director, Shorenstein APARC, Stanford University

Daniel Sneinder, Associate Director for Research, Shorenstein APARC

David Straub, Associate Director, Korean Studies Program, Shorentein APARC

Kathleen Stephens, 2013–14 Koret Fellow, Korean Studies Program, Shorenstein APARC

Seoul, Korea

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Reports of the detention and eventual release by North Korean authorities of an 85-year-old Palo Alto retiree, Merrill Newman, spurred a wave of media interest. Newman, a Korean War veteran, had decided to go on a tour of North Korea, apparently in part to revisit the place where he had served more than 60 years ago.

He was accompanied by a fellow retiree, Bob Hamrdla, also a Palo Alto resident. According to accounts provided by Hamrdla, Newman was taken off the plane as he was leaving the country after a nine-day tour. During his detention, Newman was videotaped reading an apology, in which he accepted responsibility for “hostile acts” and requested forgiveness.

After 42 days in custody, Newman was released and arrived back in the United States on Dec. 7. Newman was greeted by his family and spoke briefly to reporters, recognizing the U.S. Embassy in Beijing and the Swedish Embassy in Pyongyang for securing his release, before heading home. The full details that led to Newman’s detention still remain unclear.

Both local and national media rushed to understand these events, first reported in detail by the San Jose Mercury News (Nov. 20). Reporters sought out expertise at Shorenstein Asia-Pacific Research Center, speaking to Associate Director for Research Daniel Sneider and to Korean Studies Program Associate Director David Straub, who both have long experience with Korea and have been frequently cited as experts.

Sneider was cited in newspaper reports in the San Jose Mercury News (Nov. 20) and the Los Angeles Times; was interviewed on local radio, and also interviewed for broadcast on the evening news programs of the CBS, ABC and NBC networks local affiliates. Straub was quoted by NK News, a leading agency specializing in coverage of North Korea, also cited by the Washington Post. Most recently, Sneider was cited in the San Jose Mercury News (Dec. 7) upon the confirmation of Newman’s release.

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China and Japan have entered a dangerous standoff in the East China Sea. As China launched a series of unprecedented maritime patrols, anti-Japan protests erupted in more than 200 Chinese cities to condemn Japan's nationalization of the Senkaku/Diaoyu islands. What missed signals and domestic political pressures led to this crisis? Why did Chinese authorities tolerate widespread anti-Japanese protests in 2012 after restraining protests in earlier crises, including the 2010 dispute over a Chinese fishing captain's arrest? Drawing on material from her forthcoming book, Powerful Patriots: Nationalist Protest in China's Foreign Relations (Oxford University Press, Summer 2014), Professor Jessica Chen Weiss will trace China's management of anti-Japan protest from 1985 to 2012, discussing the role of nationalism and public opinion in Chinese foreign policy.

Jessica Chen Weiss is Assistant Professor of Political Science at Yale University and Research Fellow at the MacMillan Center for International and Area Studies. Her research interests include Chinese politics and international relations, nationalism, and social protest. Her book, Powerful Patriots: Nationalist Protest in China's Foreign Relations, is forthcoming with Oxford University Press (Summer 2014). The dissertation on which it is based won the 2009 American Political Science Association Helen Dwight Reid Award for best dissertation in
international relations, law and politics. Her research has appeared in International Organization and has been supported by the National Science Foundation, Princeton-Harvard China  & The World Program, Bradley Foundation, Fulbright-Hays program, and the University of California Institute on Global Conflict and Cooperation. Before joining the Yale faculty, she founded FACES, the Forum for American/Chinese Exchange at Stanford, while an undergraduate at Stanford (B.A., 2003). She teaches courses on Chinese foreign relations, state-society relations in post-Mao China, and anti-Americanism in world politics.

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Jessica Chen Weiss Assistant Professor of Political Science at Yale University and Research Fellow at the MacMillan Center for International and Area Studies Speaker
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On November 7, Stanford economist Takeo Hoshi presented a coauthored paper "Will the U.S and Europe Avoid a Lost Decade?  Lessons from Japan's Post Crisis Experience" at the Fourteenth Jacques Polak Annual Research Conference at the International Monetary Fund headquarters in Washington DC. 

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Sakura, the bank of Japan, April 2009
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Japan Program at Shorenstein Asia-Pacific Research Center received a grant from Sasakawa Peace Foundation in Japan for the New Channels project.  Hideichi Okada, Senior Advisor at NTT Data Institute of Management and Consulting has joined the Japan Studies Program at APARC as the 2013-14 Sasakawa Peace Fellow to play a leading role in organizing the annual New Channels Dialogue.

On October 8th, Hideichi Okada spoke on “Japan’s Energy Challenge” at a Shorenstein APARC seminar in the Philippines Conference Room at Encina Hall.  As the world watches with great interest on how Japan will overcome its energy challenges, Okada highlighted the importance of formulating a new energy policy and reducing the cost of renewable and imported hydrocarbon.  He also pointed out the challenges of decommissioning damaged nuclear power plants and cleaning contaminated soil and water, which would require a new technology as well as an international cooperation.  The talk was followed by active discussion with the participants.

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Hideichi Okada, 2013-14 Sasakawa Peace Fellow, gave a talk on "Japan's Energy Challenge" on October 8, 2013.
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The sixth annual Koret Workshop will convene to examine the obstacles to and opportunies for increased North-South Korean cooperation.

In light of changing circumstances on the Korean Peninsula, including the inauguration of new leaderships in both Seoul and Pyongyang, the workshop will take a fresh look at previous, existing, and proposed or possible joint North-South cooperative projects.

This event is made possible through the generous support of the Koret Foundation.

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As cited in Victoria McGrane's blog in the Wall Street Journal, Stanford economist Takeo Hoshi argues in a coauthored paper that Europe is making the same mistakes that Japan did during the 1990s and as a result is likely to suffer a similarly prolonged period of stagnant growth.
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Maritime security has become an increasingly salient point of friction in China-Japan relations. The focus has been small islands called Senkaku in Japanese and Diaoyu in Chinese, islands that both countries claim but Japan controls. Besides the territorial claims, many issues are at play:  historical memory, geo-strategy, the quest for natural resources, domestic nationalisms, the capacity of governments to manage crises, and Tokyo’s and Beijing’s relationship with the United States. Richard Bush, author of The Perils of Proximity: China-Japan Security Relations will address the two countries growing rivalry in the maritime domain and the implications for the United States.

Richard C. Bush III is a Senior Fellow at the Brookings Institution, Director of its Center for Northeast Asian Policy Studies, and holder of the Chen-Fu and Cecilia Yen Koo Chair in Taiwan Studies.

Bush came to Brookings in July 2002, after serving almost five years as the Chairman and Managing Director of the American Institute in Taiwan, the mechanism through which the United States Government conducts substantive relations with Taiwan in the absence of diplomatic relations.

Bush began his professional career in 1977 with the China Council of The Asia Society. From July 1983 to June 1995, we worked on the staff of the House Foreign Affairs Committee, first on the Subcommittee on Asian and Pacific Affairs (chair, Steve Solarz), and then the full committee (chair, Lee Hamilton). In July 1995, he became National Intelligence Officer for East Asia and a member of the National Intelligence Council, which coordinates the analytic work of the intelligence committee. He left the NIC in September 1997 to become head of AIT.

Bush received his undergraduate education at Lawrence University in Appleton, Wisconsin. He did his graduate work in political science at Columbia University, getting an M.A. in 1973 and his Ph.D. in 1978. He is the author of a number of articles on U.S. relations with China and Taiwan, and of At Cross Purposes, a book of essays on the history of America’s relations with Taiwan (M. E. Sharpe, 2004). In July 2005, Brookings published Untying the Knot: Making Peace in the Taiwan Strait. In March 2007, through Wylie Publishers, Richard Bush and his Brookings colleague Michael O’Hanlon released A War Like No Other: The Truth About China’s Challenge to America. In 2010, Brookings published his Perils of Proximity: China-Japan Security Relations, which focused on growing tensions in the East China Sea. In January 2013, Brookings published his Uncharted Strait: The Future of China-Taiwan Relations

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Richard C. Bush Director, Center for East Asia Policy Studies; Senior Fellow, Foreign Policy; The Michael H. Armacost Chair; The Chen-Fu and Cecilia Yen Koo Chair in Taiwan Studies Speaker The Brookings Institution
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