Corporate governance in the Asian financial crisis

Simon Johnson; Peter Boone; Alasdair Breach; Eric Friedman

doi:10.1016/s0304-405x(00)00069-6

Journal of Financial Economics Vol. 58 No. 1-2 2000

Corporate governance in the Asian financial crisis

Simon Johnson¹; Peter Boone²; Alasdair Breach³; Eric Friedman⁴

¹ Massachusetts Institute of Technology · ² Brunswick UBS Warburg, 52/4 Kosmodamianskaya Nab., Moscow, Russian Federation · ³ Goldman Sachs, 22/13 Voznesensky Pereulok, Moscow, Russian Federation · ⁴ Rutgers, The State University of New Jersey

Abstract

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.

DOI: 10.1016/s0304-405x(00)00069-6
Volume: 58
Issue: 1-2
Pages: 141-186
Language: en
Sources: bibtex:phds-export.bib openalex crossref

Corporate governance in the Asian financial crisis

Abstract

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