CORPORATE GOVERNANCE

Corporate Governance

Corporate Governance

Summary of the Thesis on Asian Financial Crisis

The thesis by Glen and Singh is mainly based around the financial crisis in Asia with the critical examination by the Greenspan-Summers-IMF. The paper is based on the elements that were involved in the crisis, including the economical factors. The corporate governance has played a major role in this aspect and in the emerging markets of the world. The paper includes arguments presented in the thesis and the degree to which they can be agreed or disagreed on, which includes criticisms. These arguments have been presented to provide an explanation related to the financial crisis.

Arguments in the Thesis

The Asian crisis emerged in the year 1997 which rapidly spread to many of the stable economies, and leading countries in the Asian region. This crisis was more likely to spread onto the countries with potential industrial capabilities. The arguments have been put forward in order to highlight the key elements involved in the crisis. The arguments provided are complex and contain numerous strands. One of the essential arguments in the thesis was related to Crony capitalism, which stated that this capitalism is not a problem of the corporate governance, but rather a result of the multifaceted relations among the elites in the domain of business and politics. According to the article, this principle exists in the extensively dispersed ownership in the systems. Another argument that has been presented is the structure of the business group in the Asian region which is supportive at the lower line of the economic growth and prosperity. This argument contains reflections of the internal capital market, which has the capability to effectively allocate the available resources.

In the context of logical and empirical argument, the problems related to the crisis can be presented with some terminologies, which include the relations with the pricing strategies in the practical stock markets, the difference among the information arbitrage, and the fundamental valuation. The arguments include the fact that the crisis is not a result of the marketplace failure, but rather a consequence that came into occurrence from the institutional failure. According to the arguments placed by the author, the Asian economies continuously failed to control the unnecessary corporate investment because of the lacking in the internal structures of the government. The arguments have reflections focusing on the fact that the Asian economies were way dissimilar, in comparison to the countries of the European region. The businesses in the Asian region have more reflections of the family owned businesses. Due to the Asian crisis, the Korean industries encountered low profit periods in the economy was highly damaged. Such similar arguments and processes took place in other Asian countries.

Degree of Agreement and Disagreement & Alternatives

The arguments presented in the article related to the Asian crisis are more agreeable in my perspective. The reason for agreement is that the arguments presented are more in the goodwill and favor of the framework that is established for the purpose of good and effective ...