Efficiency Convergence Towards International Standard: Evidence from Malaysian Listed Government Linked Companies (GLCs)
- The Journal of Developing Areas
- Tennessee State University College of Business
- Volume 49, Number 5, 2015 (Special Issue)
- pp. 197-211
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- Additional Information
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 σ 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.