1.0 INTRODUCTION The world has witnessed a serious financial crisis in East Asia, which emerged in the middle of 1997, and involved significant downward adjustments in the regional currencies and equity prices, with severe economic and financial dislocations in the affected countries. Although, the visible impact of the crisis appeared to be limited to a number of economies in the East Asian region, the crisis is seen as having a global impact that cannot be regarded as negligible given the regionกฏs growing integration with the rest of the world. This integration arising from the rapid process of globalization in international capital flows and the inexorable trend towards free markets, was made possible by the liberalization and deregulation that had been undertaken by emerging market economies. The crisis occurred at the time when the emerging market economies were attempting to adapt to the globalization of capital flows and had begun to implement more market-oriented economic policies. The crisis has raised important questions on the relative benefits of liberalization as the recipe for sustained development and global economic growth. This paper aims to analyse the causes of Asian financial crisis and examine the responses of corporate sector to the crisis. 2. 0 CAUSES The outbreak of the East Asian crisis has prompted much debate on the causes of the crisis. The crisis cannot be attributed to a single factor. A combination of factors contributed to the crisis. While the crisis was triggered by speculative attacks on East Asian currencies, the depth of the contagion highlighted the build-up of vulnerabilities in the regional economies to reversals of capital flows. To some extent, the crisis reflected the flaws of the market mechanism and inadequacy of risk assessment by international lenders. During the first half of the 1990s, financial euphoria among international lenders led to massive capital inflows into East A...