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Does Government Linked Companies (GLCs) perform better than non-GLCs? Evidence from Malaysian listed companies

Author

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  • Nazrul Hisyam Ab Razak
  • Rubi Ahmad
  • Huson Aliahmed Joher

Abstract

The purpose of this paper is to examine the impact of an alternative ownership/control structure of corporate governance on firm performance. Specifically, we investigated the governance system of government linked companied (GLCs) in Malaysia. In this paper, we examine governance mechanism and firm performance of Malaysian GLCs and non-GLCs over a 11 year period from 1995 to 2005. We only select a sample of companies which are listed in Main Board. We chose a sample of 210 firms. We used Tobin’s Q which is an indicator of market performance is used as a proxy for company’s performances; meanwhile ROA is used to determine accounting performance. . This paper is to determines whether after controlling firm specific characteristics such as corporate governance, agency cost, growth, risk and profitability, GLCs perform better than non-GLCs. Findings highlight that non-GLCs performance is better GLCs in term of corporate governance, and other firm specific characteristics. The relationship between ownership structure and firm performance has been issue of interest among academics, investors and policy makers as one of key issues in understanding the effectiveness of alternative governance systems where government ownership serves as a control mechanism.

Suggested Citation

  • Nazrul Hisyam Ab Razak & Rubi Ahmad & Huson Aliahmed Joher, 2011. "Does Government Linked Companies (GLCs) perform better than non-GLCs? Evidence from Malaysian listed companies," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 1(1), pages 1-10.
    • Handle: RePEc:spt:apfiba:v:1:y:2011:i:1:f:1_1_10
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    Citations

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    Cited by:

    1. Menon , Jayant & Ng, Thiam Hee, 2013. "Are Government-Linked Corporations Crowding out Private Investment in Malaysia?," ADB Economics Working Paper Series 345, Asian Development Bank.
    2. Said, Jamaliah & Alam, Md. Mahmudul & Abdullah, Nik Herda Nik & Zulkarnain, Nur Nadiah & Anugerah, Rita, 2019. "Innovation Risk and Sustainable Competitive Advantages: Empirical Assessment of Government-Linked Companies in Malaysia," SocArXiv u7yth, Center for Open Science.
    3. Zulkarnain, Nur Nadiah & Alam, Md. Mahmudul & Abdullah, Nik Herda Nik & Said, Jamaliah, 2019. "Organizational Learning Orientation and Sustainable Competitive Advantage: Towards More Accountable Government-Linked Companies," SocArXiv yt4xd, Center for Open Science.
    4. Said, Jamaliah & Alam, Md. Mahmudul & Abdullah, Nik Herda Nik & Zulkarnain, Nur Nadiah, 2019. "Market Orientation for Better Accountability of Government-Linked Companies," SocArXiv uxfqa, Center for Open Science.
    5. Jiang, Lei & Zhou, Haifeng & He, Shixiong, 2021. "Does energy efficiency increase at the expense of output performance: Evidence from manufacturing firms in Jiangsu province, China," Energy, Elsevier, vol. 220(C).
    6. Harry Entebang, 2019. "A Proposed Framework of Corporate Entrepreneurship in Government-linked Companies," Business Management and Strategy, Macrothink Institute, vol. 10(2), pages 234-249, December.
    7. Said, Jamaliah & Alam, Md. Mahmudul & Abdullah, Nik Herda Nik & Zulkarnain, Nur Nadiah, 2019. "Risk Management and Value Creation: Empirical Findings from Government Linked Companies in Malaysia," SocArXiv u7f4k, Center for Open Science.
    8. Wong, Wai-Yan & Hooy, Chee-Wooi, 2018. "Do types of political connection affect firm performance differently?," Pacific-Basin Finance Journal, Elsevier, vol. 51(C), pages 297-317.
    9. Raka Daniel Lihardo Sumbayak & Tony Irawan & Trias Andati, 2021. "Stock Prices Analysis of State-Owned Enterprise and Non-State-Owned Enterprise in Response to Negative Information Period 2017-2019," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(6), pages 204-204, July.
    10. Alam, Md. Mahmudul & Zulkarnain, Nur Nadiah & Abdullah, Nik Herda Nik, 2019. "Entrepreneurial Orientation for Sustainable Competitive Advantage and Risk Management: Evidence from Government-Linked Companies in Malaysia," SocArXiv wbq97, Center for Open Science.

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