What Triggers Ownership Regime Change? From Relational to Transactional View

Our study aims to unpack the heterogeneity of ownership changes at firm level in stakeholder-oriented governance system. Different from those in shareholder- oriented governance system, shareholders in stakeholder-oriented governance system are more relational and hold shares as symbolic representations of their social relationships with a firm. We claim that transactional strategies that contradict with relational view of corporate governance hurt a firm’s relationships with stakeholders and lead to ownership regime change from relational shareholders to transactional shareholders. Using a sample of listed Japanese industrial firms from 1990 to 2009, we find that transactional strategies lead to ownership regime change only when transactional strategies occur less frequently and in a smaller scope. Our findings uncover the relationship-based drivers of ownership change in stakeholder-oriented context and imply the possibility that socially constructed views of corporate governance vary across firms even in the same institutional context.