Corporate Governance in the Asian Financial Crisis
Posted: 26 Apr 2001
The "Asian Crisis" of 1997-98 affected all the "emerging markets" open to capital flows. Measures of corporate governance, particularly the effectiveness of protection for minority shareholders, explain the extent of exchange rate depreciation and stock market decline better than do standard macroeconomic measures. A possible explanation is that in countries with weak corporate governance, worse economic prospects result in more expropriation by managers and thus a larger fall in asset prices.
Keywords: Corporate governance; Investor protection; Financial crisis
JEL Classification: G18, G38, K22
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