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
Date Written: August 24, 2008
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: Suggested Citation