Some researchers have found that investments in firms which engage in unethical behavior earn abnormally negative returns for prolonged periods (Long and Rao, 1995).4 Others find that firms that have better corporate governance also have higher stock market valuations, higher profitability and faster sales, and there is evidence that buying shares of firms that score high in corporate governance and selling shares in firms that do not yields abnormally positive returns (Gompers, Ishii and Metrick, 2003).5 All of this is true not just in the United States, but globally as well.
On this point, the share of overseas business fixed investment has been rising further in recent years and Japanese firms have been increasingly expanding their overseas business activities (Charts 5 and 6).