SeminarFinancial System Workshop

Fri, Jan 26, 2024

Financial System Workshop:A comparison of the impact of regulatory sanctions on firm value: Evidence from Japan and the United Kingdom


A comparison of the impact of regulatory sanctions on firm value: Evidence from Japan and the United Kingdom


We compare the impact of regulatory sanctions on the market value of penalized firms in both Japan and the United Kingdom. By undertaking this cross-country analysis, we aim to investigate potential variations in market reactions to the publication of regulatory sanctions across different nations. Our comparative approach diverges from the predominant focus in existing literature on individual countries, allowing us to examine how two distinct national financial markets process similar information related to regulatory sanctions.


The comparison of Japan and the United Kingdom holds particular interest for two key reasons. Firstly, both countries boast financial markets of global significance. Secondly, both their financial regulatory frameworks revolve around a regulatory agency – the Financial Services Agency for Japan and the Financial Conduct Authority for the United Kingdom.


Employing an event study methodology, we scrutinize the repercussions of three types of sanctions, namely Japanese sanctions with and without fines, and British sanctions with fines. Our analysis spans from 2002 to 2023. When all Japanese and British sanctions are compared, only the announcement of British sanctions lead to a significant decline in the market value of the sanctioned firms. At the Japanese level, only the publication of sanctions coupled with fines leads to a decrease in market value for the penalized companies. However, both British and Japanese sanctions accompanied by fines elicit a comparable negative market reaction. Thus, our primary finding indicates that the British and Japanese financial markets respond similarly to analogous sanction information.

Date and Time

Friday, January 26,2024 10:30-12:00

※No need for prior registeration.


Seminar Room 1, 1F of Economics Research Annex (Kojima Hall)


Visiting researcher, The University of Tokyo
PhD student, Université Sorbonne Paris Nord & Ecole des Hautes Etudes en Sciences Sociale