By Sea-Jin Chang
The 1997 Asian predicament largely affected Thailand, Indonesia, Malaysia, and Korea in addition to different East Asian international locations seriously depending on intra-regional exchange. Banks and different monetary associations speedy develop into bancrupt, and seriously indebted business organizations went bankrupt. a lot of those organizations have been affiliated with the enterprise teams of this zone, but such a lot teams didn't instantly cave in, certainly they proved remarkably powerful, a few surviving or even prospering. This booklet examines those East Asian enterprise teams and provides very important up to date info on their next restructuring following the Asian Crisis.
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Extra resources for Business Groups in East Asia: Financial Crisis, Restructuring, and New Growth
Some leading Bumiputeras capitalists lost control of their corporate assets since they were burdened with enormous debts and depended too much on state leaders. Their corporate activities were often inXuenced by politicians and aVected by political crises. As a consequence, business groups with better political connection thrived. Others with the wrong connections lost their businesses. Polsiri and Wiwattanakantang (Chapter 7) show Thai business groups as another case of deep state involvement and ethnic conXict.
Weinstein and Yafeh (1995) argue that foreigners were discouraged from entering group-dominated industries not because groups colluded to keep them out, but because of severe competition among aYliate Wrms that Xooded the market. Other research focuses speciWcally on the relationship between main banks and group members, arguing that business groups provided corporate governance. It proposes that main banks monitored Wrms and intervened to discipline and restructure Wrms that performed poorly. Kaplan and Minton (1994), for example, found banks were more likely to dispatch directors to boards of poorly performing Wrms, while Morck and Nakamura (1999) found this result particularly true for group-aYliated Wrms.
Although regulatory changes, in particular, changes of accounting regulations, inXuenced groups’ structure and behavior, the Japanese government did not seriously attempt to break up or weaken business groups as it did not regard business groups as relevant to its reform agenda. 2. 2). 1. Financial Crisis A crisis in both Wnancial institutions’ and Wrms’ performance weakened the ties that bind groups. In 1990 and 1991, the Japanese stock market and real estate markets declined dramatically. A banking crisis, largely due to questionable loans based on inXated real estate and share prices, began to spread.