Infrastructure and Productivity in Asia

Ranjit Ajit Singh, Eng Chye Phuah and Harveen Kaur

Chapter 4 in Infrastructure and Productivity in Asia, 2005, pp 71-82 from Palgrave Macmillan

Abstract: Abstract The Asian financial crisis in the late 1990s was triggered by a sudden sharp reversal in the direction of global portfolio flows. The massive outflows within a short period of time led to a severe liquidity squeeze, which resulted in severe balance sheet stress. The combination of this with a steep correction in Asian exchange rates saw aggregate demand fall and operating costs rise overnight, undermining the viability of many Asian corporations. Productivity suffered as a result of the implicit sharp jump in the cost of capital, adversely affecting investment and consequentially confidence in these economies. Asia met the challenge head-on by directly rectifying weaknesses through macroeconomic policy and undertaking broad-based reform of the financial sector and quickly engineering a restoration of financial stability and a recovery of its economic growth rates.

Keywords: Corporate Governance; Institutional Investor; Good Governance; Minority Shareholder; Market Discipline (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-52356-2_4

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DOI: 10.1057/9780230523562_4

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