Efficiency Convergence Towards International Standard: Evidence from Malaysian Listed Government Linked Companies (GLCs)

Jennifer Tunga Janang, Rosita Suhaimi and Norhana Salamudin ()
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Norhana Salamudin: Universiti Teknologi MARA (Sarawak), Malaysia

Journal of Developing Areas, 2015, vol. 49, issue 5, 197-211

Abstract: This paper investigates the efficiency convergence of Malaysian listed government-linked companies towards the benchmarked foreign owned firms that represent international standard. We use stochastic frontier analysis to estimate production efficiencies of 31 GLCs and 15 FFs over a period of 12 years (2001–2012). The results of the s convergence test show a process of convergence although the speed is relatively slow. The study also observes a significant negative link between output generation and labour input, suggesting overcapacity in human capital investment, and a significant positive link between financial firms and inefficiency implying the need to enhance productivity driven personnel and knowledge based investments for firms in this sector.

Keywords: Government-Linked Companies; Stochastic Frontier Analysis; Efficiency Convergence (search for similar items in EconPapers)
JEL-codes: C33 D24 F43 (search for similar items in EconPapers)
Date: 2015
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