DOES GOVERNMENT OWNERSHIP MATTER? COMPARATIVE STUDY BETWEEN GLCS AND NGLCS IN MALAYSIA

Abstract

This study investigates whether government participation in firm ownership leads to better firm performance of publicly listed companies in Malaysia. The sample covers 257 companies listed on the Bursa Malaysia from 1997 to 2009. Multiple regression models with balanced panel data are used to examine the impact of government ownership (GOVN) on firm performance. We find a negative relationship between GOVN and firm performance, a finding that supports the negative public perception of government-linked companies (GLCs) in Malaysia. We conclude that government ownership is not an effective tool for improvement of firm performance in Malaysia.