control on the rea, Malaysia, cusing on the vernance. Our e firms in our mily-controlled firms. Our findings suggest that the mechanism in East Asian countries, which is mooth reallocation of money among investment projects through the internal capital markets of family-controlled group firms, does not work ancing from external capital markets, it may lead to strict internal financing constraints on investment. In this paper, we analyze in quantitative terms the influence of family pattern of corporate investment, using firm-level data from Indonesia, Ko the Philippines, and Thailand to regress the investment function and fo family ownership structure that characterizes East Asian corporate go results present evidence that family-controlled firms, the majority of th data set, face more severe internal financing constraints than non-fa commonly assumed to permit s well, and that, coupled with the difficulty of obtaining fin JEL classificat
Why has Japan suffered from the NPL problem for such a long time? We will answer to this question from a governance perspective that emphasizes important influence of the governance structure on bank management. In our opinion, Japan failed to motivate banks to play the role of monitoring essential to the bank-centered financial system. We will stress that there existed a vacuum of governance in the bank management in the sense that bank managers were not effectively disciplined as to attain sufficient prudence in there management. The vacuum of governance accounts for the fragility of the banking sector and, more importantly, the prolongation of the NPL problem in Japan. "The view that actual behaviour is always to be understood as an efficient solution to a particular incentive problem seems a very high order of rationality, and says nothing about the process by which an efficient arrangement is actually achieved." (Edwards and Fischer (1994: 28))
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