Government ownership and the performance of government-linked companies: The case of Singapore

By James S. Ang, David K. Ding. 2006

293 citations recorded by the source corpus.

Abstract In an emerging economy, the alternative to government control is often no governance. We investigate the governance structure of government-linked companies (GLCs) in Singapore under the ownership/control structure of Temasek Holdings, the government holding entity, which typically owns substantial cash flow rights but disproportional control rights and exercises no operational control. We compare the financial and market performance of GLCs with non-GLCs, where each has a different set of governance structure, the key difference being government ownership. We show that Singaporean GLCs have higher valuations and better corporate governance than a control group of non-GLCs. The results hold even when we control for firm specific characteristics such as profitability, leverage, firm size, and foreign ownership.

Subfields: Accounting

View Paper: https://www.semanticscholar.org/paper/7e67c77c9ff9f1166cf63338f329eefec95ae06c

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Citations in the corpus

Are Malaysian government-linked companies (GLCs) creating value? (2008, background): “According to the first school of thought, companies with government intervention are better governed (Caves and Christensen, 1980; Kay and Thompson, 1986; Wortzel and Wortzel, 1989; Martin and Parker, 1995; Kole and Mulherin, 1997; Ramirez and Tan, 2004; Ang and Ding, 2006).”
Ownership structure, corporate governance and corporate performance in Malaysia (2010, background): “On the other hand, Ang and Ding (2006) reported that government-linked companies had higher market valuation than non-government linked companies in Singapore.”
Sustainability Reporting and Firm Value: Evidence from Singapore-Listed Companies (2017, methodology): “The threshold is also used by Feng, Sun, and Tong [39] and Ang and Ding [40], when they examined the performance of GLCs in Singapore.”
Ownership Structure and Firm Performance: Evidence from Vietnamese Listed Firms (2016, background): “…measured by the percentage of specific ownership in a firm (Wei & Varela, 2003; De Miguel et al., 2004; Ang & Ding, 2006; Villalonga & Amit, 2006; Singal & Singal, 2011; Borisova et al., 2012) or dummy variable (Thomsen & Pedersen, 2000; Ang & Ding, 2006; Singal & Singal, 2011; Do & Wu, 2014).”