Foreign investors are looking at Asian companies in a new light. Returning profits to shareholders is now seen as a sign of success in the once-growth-obsessed region.

March 26, 2006 issue of Newsweek - Every once in a while, it makes sense to rediscover the wheel. Outside of Japan, the hot new offering from Asian companies has been a staple in U.S. and European markets for decades—it's the cash dividend on stocks. The trend reflects a dramatic shift in Asian corporate cultures since the crisis of 1997-98, when a model built on borrowing massively to finance growth, without regard to profit, crashed and burned. Before the crisis, paying out part of profits as dividends was not only rare, it "was almost seen as a sign of failure," says Robin Parbrook, head of Pacific Equities (excluding Japan) for Schroders, the international fund-management firm. "The conventional wisdom was that in fast-growing Asia, companies should invest. We have had a sea change."

Tags: Asian | business | investment