Ownership structure, agency costs, specialization, and efficiency: Analysis of keiretsu and independent insurers in the Japanese nonlife insurance industry

Journal of Risk and Insurance

Volumn 72, Issue 1, 2005, Pages 105-158

  Jeng, Vivian ^a   Lai, Gene C ^b  

^a NATIONAL CHENGCHI UNIVERSITY   (Taiwan)

^b WASHINGTON STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 16244370375     PISSN: 00224367     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.0022-4367.2005.00118.x     Document Type: Article

References (49)

1. Aly, H. Y., R. Grabowski, C. Pasurka, and N. Rangan, 1990, Technical, Scale, and Allocative Efficiencies in U.S. Banking: An Empirical Investigation, Review of Economics and Statistics, 72: 211-218.
2. Berger, A. N., J. D. Cummins, and M. A. Weiss, 1996, The Coexistence of Multiple Distribution Systems for Financial Services: The Case of Property-Liability Insurance, Journal of Business, 70(4): 515-546.
3. Berger, A. N., and D. B. Humphrey, 1991, The Dominance of Inefficiencies Over Scale and Product Mix Economies in Banking, Journal of Monetary Economics, 28(August): 117-148.
4. Berger, A. N., and D. B. Humphrey, 1992b, Measurement and Efficiency Issues in Commercial Banking, in: Z. Griliches, ed., Output Measurement in the Service Sectors, National Bureau of Economic Research, Studies in Income and Wealth, volume 56 (Chicago: University of Chicago Press), pp. 245-279.
5. Berger, A. N., W. C. Hunter, and S. G. Timme, 1993, The Efficiency of Financial Institutions: A Review and Preview of Research Past, Present, and Future, Journal of Banking and Finance, 17: 221-249.
6. Boose, M. A., 1990; Agency Theory and Alternative Predictions for Life Insurers: An Empirical Test, Journal of Risk and Insurance, 57: 499-518.
7. Brockett, P. L., W. W. Cooper, L. L. Golden, J. J. Rousseau, and Y. W. Wang, 2004, Evaluating Solvency Versus Efficiency Performance and Different Forms of Organization and Marketing in US Property-Liability Insurance Companies, European Journal of Operational Research, 154(2): 492-514.
8. Charnes, A., W. W. Cooper, and E. Rhodes, 1978, Measuring the Efficiency of Decision Making Units, European Journal of Operational Research, 2: 429-444.
9. Coase, R. H., 1960, The Problem of Social Cost, Journal of Law and Economics, 4: 1-44.
10. Coelli, T., 1996, A Guide to DEAP Version 2.1: A Data Envelopment Analysis Program, Working Paper, University of New England, Armidale, Australia.
11. Comment, R., and G. Jarrell, 1995, Corporate Focus and Stock Returns, Journal of Financial Economics, 37: 67-87.
12. Cooper, W.W., K. S. Park, and J. F. Pastor, 1999, Generalized Efficiency Measures (GEMS) and Model Relations for Use in DEA, Working Paper, University of Texas at Austin.
13. Cummins, J. D., and M. A. Weiss, 1993, Measuring Cost Efficiency in the Property-Liability Insurance Industry, Journal of Banking and Finance, 17: 463-481.
14. Cummins, J. D., and M. A. Weiss, 2000, Analyzing Firm Performance in the Insurance Industry Using Frontier Efficiency and Productivity Methods, in: G. Dionne, ed., Handbook of Insurance (New York: Kluwer Academic Publishers), pp. 767-829.
15. Cummins, J. D., M. A. Weiss, and H. Zi, 1999, Organizational Form and Efficiency: The Coexistence of Stock and Mutual Property-Liability Insurers, Management Science, 45: 1254-1269.
16. Cummins, J. D., and H. Zi, 1998, Measuring Economic Efficiency of the U.S. Life Insurance Industry: Econometric and Mathematical Programming Techniques, Journal of Productivity Analysis, 10: 131-152.
17. Elyasiani, E., and S. Mehdian, 1992, Productive Efficiency Performance of Minority and Nonminority-Owned Banks: A Nonparametric Approach, Journal of Banking and Finance, 16: 933-948.
18. Fama, E., and M. Jensen, 1983a, Separation of Ownership and Control, Journal of Law and Economics, 26: 301-325.
19. Fama, E., and M. Jensen, 1983b, Agency Problems and Residual Claims, Journal of Law and Economics, 26: 327-349.
20. Färe, R., and S. Grosskopf, 1992, Malmquist Productivity Indexes and Fisher Ideal Indexes, The Economic Journal, 102: 158-175.
21. Färe, R., S. Grosskopf, and C. A. K. Lovell, 1985, The Measurement of Efficiency of Production (Boston: Kluwer-Nijhoff).
22. Färe, R., S. Grosskopf, M. Norris, and Z. Zhang, 1994, Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries, American Economic Review, 1994: 66-83.
23. Farrell, M. J., 1957, The Measurement of Productive Efficiency, Journal of the Royal Statistical Society, 120: 253-281.
24. Fields, J. A., 1988, Expense Preference Behavior in Mutual Life Insurers, Journal of Financial Services Research, 1: 113-129.
25. Fukuyama, H., 1997, Investigating Productive Efficiency and Productivity Change of Japanese Life Insurance Companies, Pacific-Basin Finance Journal, 5: 481-509.
26. Gardner, L., and M. Grace, 1993, X-Efficiency in the U.S. Life Insurance Industry, Journal of Banking and Finance, 17: 497-510.
27. Gilson, R. J., and M. J. Roe, 1993, Understanding the Japanese Keiretsu: Overlaps Between Corporate Governance and Industrial Organization, Yale Law Journal, 102: 870-906.
28. Grace, M. F., and S. G. Timme, 1992, An Examination of Cost Economies in the United States Life Insurance Industry, Journal of Risk and Insurance, 59: 72-103.
29. Hoshi, T., A. Kashyap, and D. Scharfstein, 1990a, Bank Monitoring and Investment: Evidence from the Changing Structure of Japanese Corporate Banking Relations, in: R. G. Hubbard, ed., Information, Investment and Capital Markets (Chicago, IL: University of Chicago Press).
30. Hoshi, T., A. Kashyap, and D. Scharfstein, 1990b, The Role of Banks in Reducing the Costs of Financial Distress in Japan, Journal of Financial Economics, 27: 67-88.
31. Hoshi, T., A. Kashyap, and D. Scharf stein, 1991, Corporate Structure, Liquidity, and Investment: Evidence From Japanese Industrial Groups, Quarterly Journal of Economics, 106: 33-60.
32. Jensen, M. C., and W. H. Meckling, 1976, Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure, Journal of Financial Economics, 3: 305-360.
33. Kester, W. C., 1986, Capital and Ownership Structure: A Comparison of United States and Japanese Manufacturing Corporations, Financial Management, 15: 5-16.
34. Lai, G., and P. Limpaphayom, 2003, Organizational Structure and Performance: Evidence from the Nonlife Insurance Industry in Japan, Journal of Risk and Insurance, 70: 735-757.
35. Lamm-Tennant, J., and L. Starks, 1993, Stock Versus Mutual Ownership Structures: The Risk Implications, Journal of Business, 66: 29-46.
36. Malmquist, S., 1953, Index Numbers and Indifference Surfaces, Trabajos de Estadistica, 4: 209-224.
37. Mayers, D., and C. W. Smith, Jr., 1981, Contractual Provisions, Organizational Structure, and Conflict Control in Insurance Markets, Journal of Business, 54: 407-434.
38. Mayers, D., and C. W. Smith, Jr., 1986, Ownership Structure and Control: The Mutualization of Stock Life Insurance Companies, Journal of Financial Economics, 16: 73-98.
39. Mayers, D., and C. W. Smith, Jr., 1988, Ownership Structure Across Lines of Property-Casualty Insurance, Journal of Law and Economics, 31: 351-378.
40. Mayers, D., and C. W. Smith, Jr., 1994, Managerial Discretion, Regulation, and Stock Insurer Ownership Structure, Journal of Risk and Insurance, 61: 638-655.
41. McNamara, M. J., and S. G. Rhee, 1992, Ownership Structure and Performance: The Demutualization of Life Insurers, Journal of Risk and Insurance, 59: 221-238.
42. Nakatani, I., 1984, The Economic Role of Corporate Financial Grouping, in: M. Aoki, ed., Economic Analysis of the Japanese Firm (New York: Elsevier).
43. Prowse, S. D., 1990, Institutional Investment Patterns and Corporate Financial Behavior in the U.S. and Japan, Journal of Financial Economics, 27: 43-66.
44. Prowse, S. D., 1992, The Structure of Corporate Ownership in Japan, Journal of Finance, 47: 1121-1140.
45. Sheard, P., 1989, The Main Bank System and Corporate Monitoring and Control in Japan, Journal of Economic Behavior and Organization, 11: 399-422.
46. Sheard, P., 1994, Reciprocal Delegated Monitoring in the Japanese Main Bank System, Journal of the Japanese and International Economies, 8: 1-21.
47. Shephard, R. W., 1970, Theory of Cost and Production Functions (Princeton, NJ: Princeton University Press).
48. Williamson O., 1963, Managerial Discretion and Business Behavior, American Economic Review, 53: 1032-1057.
49. Yuengert, A., 1993, The Measurement of Efficiency in Life Insurance: Estimates of a Mixed Normal-Gamma Error Model, Journal of Banking and Finance, 17: 483-496.