Determining the existence of Amakudari in publicly-traded Japanese companies: a Poisson regression approach

Amakudari is a political-economic phenomenon frequently observed in the Japanese economy and other modern societies. Retired high-ranking bureaucrats are appointed as top executives in lucrative private firms that are controlled by the government ministry or main banks that Amakudari once regulated. These high-ranking ex-government officials use their influence for favourable legislation and treatment to help their companies. Due to the fact that Japanese publicly traded companies hire mostly a smaller portion of directors through Amakudari and sometimes none of them are hired, the most commonly used classical linear regression framework cannot be applied due to violating an assumption on the continuous dependent variable. Instead, this study adopts a counting-process regression approach in order to explain the existence of Amakudari using 2003 data of all publicly traded companies in Japan.