How cultural factors led to risky antecedent market conditions and the 1997 Asian economic crisis

Abstract

While a large body of literature lays the blame of the 1997 Asian economic crisis on external factors, such as Japan's recession, speculative foreign investors, and non-stringent international bank credit, the body of literature examining the cultural factors is emerging. The purpose of this chapter is to examine the internal antecedents to the Asian crisis by focusing on region-specific cultural conditions leading to the crisis. Important cultural factors of collectivism, authoritarianism, and power-distance distance that led to precarious and risky financial practices are explored. This chapter proposes that investors and academics look beyond economic ‘hard’ data, and examine the values, traits, and customs of a society in order to evaluate the possibility of a financial collapse.

Citation

Kellerman, E.A. and Alon, I. (2001), "How cultural factors led to risky antecedent market conditions and the 1997 Asian economic crisis", Choi, J.J. (Ed.) Asian Financial Crisis Financial, Structural and International Dimensions (International Finance Review, Vol. 1), Emerald Group Publishing Limited, Leeds, pp. 439-457. https://doi.org/10.1016/S1569-3767(00)01018-9