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

Arbeitspapier

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.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ADB Economics Working Paper Series ; No. 345

Classification and Topics

• Classification: Wirtschaft ; Investment; Capital; Intangible Capital; Capacity ; International Factor Movements and International Business: General ; International Investment; Long-term Capital Movements ; Labor Discrimination: Public Policy ; Economywide Country Studies: Asia including Middle East
• Subject: Malaysia ; private investment ; government-linked corporations ; crowding-out effect

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Menon , Jayant ; Ng, Thiam Hee
• Event: Veröffentlichung
• (who): Asian Development Bank (ADB)
• (where): Manila
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/109468