Reconsidering American interests in emerging market crises: An unanticipated outcome to the Asian financial crisis

Foreign commercial and economic behaviour in emerging markets continues to be a contentious issue. This article reconsiders the claim that US actors leverage their influence at times of economic crisis to pry open developing markets to American business ownership. On the basis of a number of theoretical propositions and evidence from Korea and Thailand, the article argues that American government agencies and firms took several different directions after the Asian financial crisis, rather than exhibiting a coherent response. On the one hand, assertive US actions were taken to facilitate market opening in Korea and Thailand but on the other hand, US companies placed relatively little foreign investment in these countries. The interests of US actors are disaggregated in the article to demonstrate the importance of an autonomous Treasury Department and the separate but no less important activities of corporate restructuring specialists, such as investment banks. The outcome of the Asian crisis at the firm level is linked to new trends in US foreign investment, namely the rise of outsourcing and private equity funds, as well as the concentration of US ownership in services and science-based sectors. The article downplays the significance of European acquisitions in Asia concluding instead that the Asian crisis, in fact, re-affirmed specific strengths of US capital.