Development vs. political views of government ownership: How does it affect investment efficiency?

Ahmad Ghazali, Karren Lee-Hwei Khaw and Fauzi Bin Zainir

Finance Research Letters, 2022, vol. 48, issue C

Abstract: This study connects the development view and political view of government ownership with the firm life cycle theory to explain firms’ investment efficiency. We find that government ownership of firms in the introduction and decline stages is driven by the development view that improves investment efficiency. However, consistent with the political view, higher government ownership worsens firms' investment efficiency in the growth and mature stages. For firms in these two stages, we also find a significant threshold effect of government ownership on investment efficiency. Our results imply that the government's participation objective is different based on the firms’ development stages.

Keywords: Government ownership; Investment efficiency; Firm life cycle; Development view; Political view (search for similar items in EconPapers)
JEL-codes: G3 G31 G32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322002720

DOI: 10.1016/j.frl.2022.103034

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