Corporate Governance in Asia: A Survey

43 Pages Posted: 28 Apr 2003

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Joseph P. H. Fan

The Chinese University of Hong Kong (CUHK) - School of Accountancy

Multiple version iconThere are 2 versions of this paper

Date Written: January 2003


Corporate governance has received much attention in recent years, partly due to the Asian financial crisis. We review the literature on corporate governance issues in Asia to develop region-specific and general lessons. Much attention has been given to poor corporate sector performance, but most studies do not suggest Asian firms were badly run. The literature does confirm the limited protection of minority rights in Asia, allowing controlling shareholders to expropriate minority shareholders. Agency problems have been exacerbated by low corporate transparency associated with rent-seeking and relationship-based transactions, extensive group structures and diversification, and risky financial structures. The controlling shareholder bears some of agency costs in the form of share price discounts and expenditures on monitoring, bonding and reputation building. The Asian financial crisis further showed that conventional and alternative corporate governance mechanisms can have limited effectiveness in systems with weak institutions and poor property rights. Overall, the understanding of the determinants of firm organizational structures, corporate governance practices and outcomes remains limited, however.

JEL Classification: G34, G32, G38, G33

Suggested Citation

Claessens, Stijn and Fan, Po Hung Joseph P. H., Corporate Governance in Asia: A Survey (January 2003). Available at SSRN: or

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel

Po Hung Joseph P. H. Fan

The Chinese University of Hong Kong (CUHK) - School of Accountancy ( email )

Shatin, N.T.
Hong Kong
(852) 26097839 (Phone)
(852) 26035114 (Fax)

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