TY - JOUR
T1 - Development vs. political views of government ownership: How does it affect investment efficiency?
AU - Ghazali, Ahmad
AU - Khaw, Karren Lee-Hwei
AU - Zainir, Fauzi Bin
N1 - Publisher Copyright:
© 2022
PY - 2022/8
Y1 - 2022/8
N2 - 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.
AB - 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.
KW - Development view
KW - Firm life cycle
KW - Government ownership
KW - Investment efficiency
KW - Political view
UR - http://www.scopus.com/inward/record.url?scp=85131445832&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2022.103034
DO - 10.1016/j.frl.2022.103034
M3 - Article
AN - SCOPUS:85131445832
SN - 1544-6123
VL - 48
JO - Finance Research Letters
JF - Finance Research Letters
M1 - 103034
ER -