Date of Award

1996

Degree Type

Dissertation

Degree Name

Doctor of Philosophy in Business Administration

Specialization

Finance

Department

Finance and Insurance

First Advisor

Rosita Chang

Abstract

Apart from the fact there is continuous support and nurturing ofBumiputera entrepreneurship by the Malaysian government, very little is known about the politicallyaffiliated business group in Malaysia. This 100 percent Bumiputera group of companies emerged 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, conglomerates in the country. This dissertation examines the profitability performance, investment and financing decisions of the politically-affiliated business group, and compares it to that of independent group. Since studies on corporate grouping are mostly concentrated in the "bank oriented" system of the Japanese keiretsu [Nakatani (1984); Kester (1991, 1992); Kaplan (1992); Hoshi, Kashyap and Sharfstein (1990, 1991); Prowse (1990, 1992)], the existence of the results from research on the Japanese system allows us to provide an explanation of the behavior of the corporate grouping in Malaysia, within the context of the politically-affiliated business group.

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