Ownership Structure and Corporate Performance: A Comparative Analysis of Government Linked and Nongovermnent Linked Companies from Bursa Malaysia

Posted: 25 Aug 2008 Last revised: 4 Apr 2013

See all articles by Nazrul Hisyam Ab Razak

Nazrul Hisyam Ab Razak

University of Putra Malaysia - Department of Accounting and Finance, Faculty of Economics and Management

Rubi Ahmad

University of Malaya (UM)

Huson Joher Aliahmed

King Abdulaziz University

Date Written: August 24, 2008

Abstract

Government ownership serves as a control mechanism for management activities hence better performance. This paper examines the impact of an alternative ownership/control structure of corporate governance on firm performance. Specifically, we investigate the governance system of government linked companied (GLCs) and non government linked companies after controlling firms' specific characteristics such as corporate governance, agency cost, growth, risk and profitability. The measure of performance is proxy by Tobin's Q as a market measure while ROA is as an accounting performance measure. In this paper we adopted panel based pooling regression over a period from 1995 to 2005. The results suggest an interesting distinction between these two groups of companies. Generally GLCs appears to performance better than non GLCs companies which in other words align with the contention that government ownership mechanism help to perform better.

Keywords: Government ownership, Government linked companies, corporate governance, agency costs, and performance

JEL Classification: G3, G320, G330, G350, 380

Suggested Citation

Ab Razak, Nazrul Hisyam and Ahmad, Rubi and Aliahmed, Huson Joher, Ownership Structure and Corporate Performance: A Comparative Analysis of Government Linked and Nongovermnent Linked Companies from Bursa Malaysia (August 24, 2008). 21st Australasian Finance and Banking Conference 2008 Paper, Available at SSRN: https://ssrn.com/abstract=1252502 or http://dx.doi.org/10.2139/ssrn.1252502

Nazrul Hisyam Ab Razak (Contact Author)

University of Putra Malaysia - Department of Accounting and Finance, Faculty of Economics and Management ( email )

Serdang, Selangor 43400 UPM
Malaysia
603-89467630 (Phone)

Rubi Ahmad

University of Malaya (UM) ( email )

Kuala Lumpur, Wilayah Persekutuan 50603
University of Malaya (UM)
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia
+603 79673961 (Phone)

Huson Joher Aliahmed

King Abdulaziz University ( email )

P.O.Box 80200
Jeddah, 21589
Saudi Arabia

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