Are Government-Linked Corporations Crowding out Private Investment in Malaysia?
AbstractPrivate investment in Malaysia has been sluggish since the Asian financial crisis. One explanation is that the growing presence of government-linked corporations (GLCs) has been crowding out private investment. For the first time, we provide empirical evidence on the relationship between GLC presence and private investment. We find that when GLCs are dominant in an industry, investment by private firms is significantly negatively impacted. Conversely, when GLCs do not dominate an industry, the impact on private investment is not seen. To revive private investment in Malaysia, government must not only redress its growing fiscal deficit, but also expedite its program of divestment.
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Bibliographic InfoPaper provided by Asian Development Bank in its series ADB Economics Working Paper Series with number 345.
Length: 16 pages
Date of creation: 30 Apr 2013
Date of revision:
Malaysia; private investment; government-linked corporations; crowding-out effect;
Other versions of this item:
- Jayant Menon & Thiam Hee Ng, 2013. "Are Government-Linked Corporations Crowding out Private Investment in Malaysia?," Departmental Working Papers 2013-03, The Australian National University, Arndt-Corden Department of Economics.
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- F20 - International Economics - - International Factor Movements and International Business - - - General
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- R. Glenn Hubbard, 1997.
"Capital-Market Imperfections and Investment,"
NBER Working Papers
5996, National Bureau of Economic Research, Inc.
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