Corporate Governance in the Asian Financial Crisis 1997-98

SITE Working Paper No. 137

Posted: 9 Mar 1999

See all articles by Simon Johnson

Simon Johnson

Massachusetts Institute of Technology (MIT) - Entrepreneurship Center; National Bureau of Economic Research (NBER)

Alasdair Breach

Russian-European Centre for Economic Policy

Eric Friedman

Cornell University - Operations Research & Industrial Engineering

Date Written: September 1998

Abstract

The "Asian Crisis" of 1997-98 has affected almost all the "emerging markets" open to capital flows. Measures of corporate governance, particularly the effectiveness of protection for minority shareholders, explain the extent of stock market decline better than do standard macroeconomic measures. The explanation is that in countries with weak corporate governance, worse economic prospects result in more stealing by managers and thus a larger fall in asset prices.

JEL Classification: G12, G34

Suggested Citation

Johnson, Simon and Breach, Alasdair and Friedman, Eric, Corporate Governance in the Asian Financial Crisis 1997-98 (September 1998). SITE Working Paper No. 137, Available at SSRN: https://ssrn.com/abstract=155008

Simon Johnson (Contact Author)

Massachusetts Institute of Technology (MIT) - Entrepreneurship Center ( email )

United States
617-253-8412 (Phone)
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National Bureau of Economic Research (NBER)

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Alasdair Breach

Russian-European Centre for Economic Policy ( email )

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Russia
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(7 095) 232 3739 (Fax)

Eric Friedman

Cornell University - Operations Research & Industrial Engineering ( email )

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United States
607-255-9130 (Phone)
607-255-9129 (Fax)

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