Ownership Structure Variation and Firm Efficiency

Sallahuddin Hassan, Zalila Othman, Mukaramah Harun

Abstract


Firms with different ownership structures could be argued to have different levels of efficiency. Highly concentrated firms are expected to be more efficient as this type of ownership structure may alleviate the conflict of interest between managers and shareholders. In Malaysia, public-listed firms have been found to have highly concentrated ownership structure. However, whether this evidence holds for every industry has not been established. Hence, the objective of this paper is to investigate whether there are variations in ownership structure and firm’s efficiency across sectors. To achieve this objective, the frequency distributions of ownership structure were calculated and firms’ efficiency scores for consumer products, industrial products, construction and trading/services sectors were measured. Data Envelopment Analysis (DEA) under the assumptions of constant returns to scale (CRS) and variable returns to scale (VRS) was employed to estimate firms’ efficiency scores. A sample of 156 firms listed on the Kuala Lumpur Stock Exchange (KLSE) was selected using the stratified random sampling method. The findings have shown that there are variations in firm ownership structure and efficiency across sectors.

Full Text: PDF DOI: 10.5539/ass.v10n11p233

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

Asian Social Science   ISSN 1911-2017 (Print)   ISSN 1911-2025 (Online)

Copyright © Canadian Center of Science and Education 

To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.