The Accelerating Dissolution of StockCross-holding

Hideaki Inoue

1.Introduction

The decline of stock cross-holding among companies has been attributed to many factors，including: the floundering post-bubble stock market， which has revealed the inherent risk ofstockholding; stricter management accountability based on corporate governance concepts;and the shift to new financial accounting standards that require consolidated reporting andmarket valuation.

Our annual survey of stock cross-holding among companies listed on Japan’s stockexchanges， conducted at the end of March 1999， found that companies are dissolving theirstock cross-holdings at an increasingly rapid pace. This paper briefly describes the surveyfindings.