Business groups in East Asia: Post-crisis restructuring and new growth

See Granovetter (1995) for a review. Ghemawat and Khanna (1998) provide a table that summarizes the evidence that business groups are prevalent in developing countries. See McVey (1992) and Orru et al. (1997) for examples of business groups in Southeast Asia, Strachan (1976) for Nicaragua, and Ghemawat and Khanna (1998) and Kedia et al. (2006) for India, Chang (2003a) for Korea, and Khanna and Wu (1998) for Chile. Business groups emerged in former socialist countries during the privatization process. During the rapid privatization in Czechoslovakia, various forms of cross ownership among banks and investment trust funds were formed, and many of those investment trust companies turned themselves into holding companies (Coffee, 1999). Similarly, Stark (1996) showed how previously state-owned firms in Hungary purchased small firms and formed groups.

See the following for more information on the structural weaknesses of East Asian countries: International Monetary Fund (IMF) (1999), World Bank (1998) and World Bank (2000).

See World Bank (2000).

This section is largely drawn from Chang (2006).