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

Author

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  • Jennifer Tunga Janang
  • Rosita Suhaimi
  • Norhana Salamudin

    (Universiti Teknologi MARA (Sarawak), Malaysia)

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.

Suggested Citation

  • Jennifer Tunga Janang & Rosita Suhaimi & Norhana Salamudin, 2015. "Efficiency Convergence Towards International Standard: Evidence from Malaysian Listed Government Linked Companies (GLCs)," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(5), pages 197-211, Special I.
    • Handle: RePEc:jda:journl:vol.49:year:2015:issue5:pp:197-211
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    More about this item

    Keywords

    Government-Linked Companies; Stochastic Frontier Analysis; Efficiency Convergence;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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