Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/328533 
Year of Publication: 
2022
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 10 [Issue:] 10 [Article No.:] 233 [Year:] 2022 [Pages:] 1-13
Publisher: 
MDPI, Basel
Abstract: 
When the government creates state-owned enterprises (SOEs), one of the primary purposes is to reduce its financial burden in the long run, also called financial sustainability. Nonetheless, previous research has pointed out that SOEs struggle to achieve financial sustainability due to government intervention. In this study, we examine the relationship between the financial sustainability of SOEs and government intervention in Malaysia. We take a novel approach, using share ownership to measure government intervention. Our results show that the threshold effect of government ownership on financial sustainability in Malaysia is around 27%. The findings prove that the SOEs of an emerging country could reach financial sustainability only if the government ownership is below the threshold. Finally, this study discusses the policy implications of our findings for SOEs. The government of Malaysia should propose a road map to gradually reduce its ownership of SOEs below the threshold.
Subjects: 
emerging economies
financial sustainability
government ownership
state-owned enterprises
threshold effect
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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