| Abstract: | Abstract Since 1997, efforts to explain the East Asian economic crisis have proliferated with most analyses focusing on government profligacy, weak monetary policy, inadequate regulation of the region's financial services industry, too much speculative borrowing, unsustainable trade imbalances financed with easily withdrawn short-term financing, and both private sector and government corruption. Unfortunately, what has proven especially difficult for analysts and government officials, even with all of the research that has taken place, is reaching some consensus on which features of the crisis were symptoms and which were causes (Economist, 1998). One reason for this is that the explanations offered to date have been almost entirely western in perspective and, predictably, based strictly on application of the kind of economic models Krugman (1998) has described. Furthermore, most of the research has had a clear government and public policy focus rather than a strategic and managerial focus. Employing a behavioral finance/economics paradigm, this study explores the premise that the East Asian crisis was at least a partial function of a time-honored practice that has remained largely hidden from the Occidental eye and unmeasured by conventional economic modeling: the practice of Asian-style relationship-based lending. |
