The Financial System and Corporate Investment: A Comparative Analysis of Malaysia, Thailand and the Industrialised Countries

How do industrial and industrialising country corporations finance their investment and what role do the systems of industrial finance and governments play in this process? These explorations reveal that the corporate sectors in industrialising countries finance their investment in a remarkably similar way to those in advanced countries. Although there has been marginally greater use of emerging stock market financing, the patters which emerge are in many respects similar to those in advanced countries. These industrialising countries can therefore be grouped into the `market-based' or `bank-based' classifications usually used to describe advanced countries. Thailand relies predominantly on external financing from bank loans, as is the case in Japan, whereas Malaysia, like the UK and the US, finances a large proportion of its investment from retained profits.