Performance of group -affiliated firms: A study of a politically affiliated business group in Malaysia

M. Fazilah Binti Abdul Samad, University of Rhode Island

Abstract

Apart from the fact there is a continuous support and nurturing of Bumiputera entrepreneurship by the Malaysian government, very little is known about the politically-affiliated business group in Malaysia. This 100 percent Bumiputera group of companies emerges as a result of the New Economic Policy. It started as a group of ailing businesses in the early 1980s, but with strong support from the government and ingenious Bumiputera leadership, it became one of the biggest, if not the biggest, conglomerate in the country. Political party involvement in business is not unique to this part of the world. In Indonesia, three political parties had established business enterprises in the 1950's. However, the rise of military rule and the subsequent suppression of these parties led to the cessation of their involvement in business. Political involvement in business in South Korea is less direct. A corporate group in South Korea known as chaebol is also nurtured and guided by the government, and receives government privileges. Nonetheless, it cannot be considered as a politically-affiliated business group since it consists of independent manufacturing firms merged into a large conglomerate. This dissertation examines the politically-affiliated business group in Malaysia within the context of the theory of corporate grouping. Since studies on corporate grouping are mostly concentrated in the "bank oriented" system of the Japanese keiretsu, the existence of a number of results on the Japanese system allow us to provide some explanation to the behavior of corporate grouping in Malaysia. The three main issues examined in the dissertation are profitability performance, investment and financing decisions. ^

Subject Area

Business Administration, General|Economics, Commerce-Business|Economics, Finance|Political Science, General

Recommended Citation

M. Fazilah Binti Abdul Samad, "Performance of group -affiliated firms: A study of a politically affiliated business group in Malaysia" (1996). Dissertations and Master's Theses (Campus Access). Paper AAI9723550.
http://digitalcommons.uri.edu/dissertations/AAI9723550

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