THE ASIAN CRISIS AND CORPORATE GOVERNANCE - OWNERSHIP STRUCTURE, DEBT FINANCING, AND CORPORATE DIVERSIFICATION

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Masaharu Hanazaki, Qun Liu

DOI:10.22495/cocv3i3p5

Abstract

Based on firm-level analysis, this paper suggests that ownership concentration enabling controlling shareholders to expropriate other shareholders; fund raising through debt that is short of effective monitoring by creditors; and inefficiency caused by the ill effects of diversification are all associated with significantly worse performance during the Asian crisis. The region’s predominant governance structure, characterized by family control and conglomerates, was considered a factor in its miraculous economic development but has been seen since the crisis as the of crony capitalism.

Keywords: Asian Crisis, Ownership Structure, Debt Financing

How to cite this paper: Hanazaki, M., & Liu, Q. (2006). The Asian crisis and corporate governance - ownership structure, debt financing, and corporate diversification. Corporate Ownership & Control, 3(3), 60-78. http://doi.org/10.22495/cocv3i3p5