The relation of cause and effect between the percentage of foreign shareholders and the number of employees in Japanese firm

Foreign shareholders have purchased many stocks issued by Japanese firms in recent years. Thus, they are expected to have a strong influence. In this paper, I analyze whether or not foreign shareholders demand changes in the number of employees in the firms of the foods, chemical, glass, electronic products, land transportation, warehousing or wholesale industries on the basis of the financial data from the fiscal year 1997 to 2007. The analysis showed that the number of employees increase if foreign shareholders purchase stocks in the chemical and land transportation since managers gain confidence if foreign investors actively invest their company. On the other hand, foreign shareholders tend to invest firms which are going to reduce the number of employees in the electronic product.