StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Globalization and Corporate Governance in East Asia - Essay Example

Cite this document
Summary
The paper "Globalization and Corporate Governance in East Asia" highlights that after the Asian financial crisis and following economic growth, many Asian countries have tried to depart from their own traditional systems of corporate governance and introduce new governance systems. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.3% of users find it useful
Globalization and Corporate Governance in East Asia
Read Text Preview

Extract of sample "Globalization and Corporate Governance in East Asia"

Download file to see previous pages

This paper examines the recent change or governmental reformation of Japan, China, and Singapore in terms of corporate ownership structure and governance. The analysis of this paper shows that globalization plays an important role in dissolving the existing corporate ownership and strengthening the corporate governance in these three countries. However, this analysis also shows that because of its strong inherence and utility derived from specific features of these three countries, the characteristics of ownership and corporate governance and their effects remain in these countries. Finally, this paper also touches on the potential of other elements that affect corporate governance from different perspectives. Corporate ownership has been one of the biggest concerns of corporate governance for many years.

Much previous research argues the prevalence of widely held corporations in the United States in which corporate ownership is dispersed among small shareholders1. Under such structures, the main concern of corporate governance is how to reduce the potential conflict between the interests of managers and stockholders, or so-called agency problems.2 However, as we look outside the United States, especially in countries with poor minority shareholder protections, even the largest firms often have controlling shareholders3.

In those countries, the central agency problem is how to restrict the expropriation of minority shareholders by controlling shareholders through the improvement of minority protections4. Corporate ownership in Asia is also largely different from the U.S. Asian characteristics, as containing a high concentration of ownership comes from family, state, and group ownership and low liquidity of shares5. Claessens investigated the separation of ownership and control in 2980 publicly traded companies in nine East Asian countries6 (Hong Kong, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand).

This study finds that in all countries, especially in Indonesia, Japan, and Singapore, voting rights consequently exceed cash-flow rights through pyramid structures and cross-holding. It also finds that more than two-thirds of firms in these countries are controlled by a single shareholder7. It is not hard to anticipate that under this corporate structure, the conflict of interests between majority and minority shareholders causes an adverse effect on corporate governance. Several studies show that concentrated ownership causes the low market valuation of firms and expropriation of minority shareholders in Asia8.

This expropriation is more detrimental in a country with weaker legal systems9. Although differences between countries are significant, White Paper on Corporate Governance in Asia emphasized that the protection of minority shareholders' rights was particularly critical in Asia10. There are three types of corporate ownership in Asia, which are family, state, and group ownership. More than half of Asian corporations are family-owned. Hong Kong, China, Malaysia, Indonesia, and Thailand show high degrees of family ownership.

State control is significant in China and Singapore. In Japan and Korea, group companies are characterized by interlocking cross-holdings of equity. These characteristics of corporate structure, however, have gradually changed in the 21st century because of Asian economic growth and capitalist globalization. Corporate governance in Asia has been subjected to reformation due to criticism for its weakness after the Asian financial crisis. 

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Corporate Governance and Ownership Essay Example | Topics and Well Written Essays - 8000 words”, n.d.)
Retrieved from https://studentshare.org/law/1397693-corporate-governance-and-ownership
(Corporate Governance and Ownership Essay Example | Topics and Well Written Essays - 8000 Words)
https://studentshare.org/law/1397693-corporate-governance-and-ownership.
“Corporate Governance and Ownership Essay Example | Topics and Well Written Essays - 8000 Words”, n.d. https://studentshare.org/law/1397693-corporate-governance-and-ownership.
  • Cited: 0 times

CHECK THESE SAMPLES OF Globalization and Corporate Governance in East Asia

The Economic Success of South Korea

The Korean economy is often looked up to as a model for economic success in asia.... The Korean economy is often looked up to as a model for economic success in asia, although studies show that there are certain aspects where Korea departed from the Pacific-Asian model, and in other aspects are consistent with it.... The Korean economy is often looked up to as a model for economic success in asia, although studies show that there are certain aspects where Korea departed from the Pacific-Asian model, and in other aspects are consistent with it....
6 Pages (1500 words) Essay

WTO: Fighting the Globalization Beast

The IMF likewise has done a good job helping nations by imposing financial discipline in governments hampered by inexperience, populist bias, and poor governance (Fischer 91).... ow did it happen Simply, world peace led to the globalization of world trade.... Understanding and making an objective critical assessment of the WTO would be impossible without knowing why it exists....
10 Pages (2500 words) Essay

Economic Development in East Asia

east asia is composed of many countries.... The development of each country contributed to the total development of east asia.... rom then it has been a growing stage for each country as well as the east asia as a whole.... east Asian countries did not face this problem.... Though east Asian countries were experiencing growth, in the 1980s there was a setback which the countries found it difficult to cope up with....
8 Pages (2000 words) Essay

It would not be possible to create a global corporate governance code

The convergence towards corporate governance has made some progress, along theoretical lines, as well as in accordance with the compulsions presented by globalization spurred corporate transactions.... The EU nations still have considerable differences in their corporate practices, structures and law and it would take a long time before a meaningful harmonization of corporate governance code is achieved in the EU.... sian countries have their own distinct and peculiar economic, social, political,cultural characters tics that are standing in the way of their inclusion ,in letter and spirit, in any attempt to derive a global corporate governance code. ...
20 Pages (5000 words) Essay

Marketing in South East Asian Region

This paper ''Marketing in South east Asian Region'' tells us that marketing, in general, is described as an activity of a corporate organization that has a direct bearing on the acceptance of the organization's product in the market.... The dominant change in the world economy is of course is the globalization of markets....
6 Pages (1500 words) Essay

Is the developmental state strengthened or weakened by globalization and global governance

s the developmental state strengthened or weakened by globalization and global governance?... lobalization and global governance offers both opportunities and threats to developmental states.... This question requires research on developmental states and globalization.... globalization affects every country in the world through interactions between and among members of different states as they trade, travel and sport.... Singapore is a developmental state that has benefited from globalization while Japan, South Korea and Malaysia seemed to have been shaken....
20 Pages (5000 words) Essay

Asian Financial Crisis and Globalisation

Since the economic crisis of asia begun two years ago, the region has started to express its doubts about the impacts of globalization on the regional societies (Michie Asian Financial Crisis and Globalisation Introduction When the world first came up with the idea of globalization, its main aim was to integrate the regional economies, cultures and societies through a global network of political ideas.... However this is not the case in asia especially in countries like Thailand, Malaysia, Korea and Indonesia....
2 Pages (500 words) Essay

Critics of South East Asias Political and Economic Systems

The author of the "Critics of South east asia's Political and Economic Systems" paper examines the legitimacy of prescriptions of new approaches that would deal with the crisis in China, South Korea, Japan, and Taiwan and give recommendations on the way forward.... The forces of globalization propagated east asia's economic success.... Some of them prescribed reformist agendas that would prepare these South east Asian countries for future effects of globalization....
10 Pages (2500 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us