ABSTRACT
A related problem is that Asian economies have a considerable concentration of ownership of companies. Most companies in Asia either have a majority shareholder, or a tightly knit group of minority shareholders who act in concert to control the company. Often the company is part of an extensive corporate network, which in turn has majority shareholders. The most common company form in East Asia is the diversified conglomerate, which is controlled and managed by a single extended family. Companies with widely dispersed ownership are rare in Asia. In this context it is difficult to protect the rights of minority shareholders. Though there are usually laws and penalties against insider trading and related party transactions, as well as on the conduct of substantial transactions and takeovers, it is open to question how often and how rigorously these are enforced (Prowse 1998).
