Are Government-Linked Corporations Crowding out Private Investment in Malaysia?

Jayant Menon () and Thiam Ng

No 345, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Private 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.

Keywords: Malaysia; private investment; government-linked corporations; crowding-out effect (search for similar items in EconPapers)
JEL-codes: E22 F20 F21 J78 O53 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-04-30
Note: http://www.adb.org/sites/default/files/pub/2013/ewp-345.pdf
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.adb.org/publications/are-government-li ... -investment-malaysia Full text (text/html)

Related works:
Working Paper: Are Government-Linked Corporations Crowding out Private Investment in Malaysia? (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0345

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().