*3.2. Sample Description*

We applied the archival research method in which data was collected from various secondary sources. General and financial data were collected from OSIRIS (software version 213, a database managed by Bureau van Dijk, BvD). The search strategy was customized to look for all of the listed companies in the manufacturing industry in Japan. First of all, companies that were in operation in Japan were selected. Then, all companies in the manufacturing industry were chosen based on the North American Industry Classification System (NAICS). After the initial search, 1601 companies

were identified as publicly listed Japanese companies in the manufacturing industry. Companies were grouped into 21 different sub-industry codes, depending on the nature of their business. These companies were then screened to see if they had sufficient data for analysis. We omitted 163 companies that lacked 5-year financial data and 26 companies that changed their industries during the study period 2014–2108. Accordingly, our sample firms reduced to 1412 publicly listed firms in the manufacturing industry, giving a sample size of 1412 × 5 = 7060 observations (*n* × *T*). We collected corporate governance data from Bloomberg. Table 1 lists out the number and percentage of family and non-family firms in each industry grouping.

**Table 1.** Family and non-family manufacturing firms by North American Industry Classification System (NAICS) 2017 Code.


Note: This table shows the number and the percentage of family firms and non-family firms in the manufacturing industry in Japan. The industry classification is based on the North American Industry Classification System 2017, extracted from the OSIRIS database. The sample comprises of listed firms on the Stock Exchange of Tokyo, Osaka, and Nagoya.

Table 1 reveals that family firms account for 39% of the manufacturing firms in Japan. The distribution in the number of family firms in the top five segments, such as computer and electronics (43%), chemicals (36%), machinery (40%), transportation equipment (32%), and food manufacturing (40%), is found to be relatively closer. For other segments, the distribution between family and non-family firms is found to be skewed. For example, ten firms out of twelve firms in furniture and related product manufacturing are found to be family firms. Likewise, only 10% of firms are seen to be family firms in petroleum and coal product manufacturing. Finally, the statistical data indicates that the presence of family firms in the Japanese manufacturing industry is strong, except for some variations. This also supports previous academic research that family ownership is an essential characteristic of Japanese firms.
