Malaysia’s firm ownership structure has shifted as business organizations thrive and the national economy expands. Furthermore, it has changed as a result of the government’s economic transition, industrialization, and privatization policies implemented over the last four decades. Firms with various ownership structures may be said to have varying levels of efficiency. Highly concentrated firms are expected to be more efficient because this type of ownership structure may reduce the conflict of interest that exists between managers and shareholders. Publicly traded companies in Malaysia have been found to have a highly concentrated ownership structure. However, it is unclear whether this evidence applies to all industries. As a result, the goal of this paper is to see if there are differences in ownership structure and firm efficiency across sectors. To achieve this goal, the frequency distributions of ownership structure were calculated, as well as the efficiency scores of firms. Consumer goods, industrial goods, construction, and the trading/services sectors were all assessed. To estimate firm efficiency scores, Data Envelopment Analysis (DEA) was used with the assumptions of constant returns to scale (CRS) and variable returns to scale (VRS). The stratified random sampling method was used to select a sample of 156 firms listed on the Kuala Lumpur Stock Exchange (KLSE). According to the findings, there are differences in firm ownership structure and efficiency across sectors. According to this study, firms with high ownership concentration appear to be more efficient than firms with low ownership concentration. As a result, the government should ensure that Malaysian companies improve their corporate governance practices in order to increase efficiency.

Author(s) Details

Profesor Dr. Sallahuddin Hassan
School of Economics, Finance and Banking, UUM COB, Universiti Utara Malaysia, Malaysia.

Zalila Othman
School of Economics, Finance and Banking, UUM COB, Universiti Utara Malaysia, Malaysia.

Associate Profesor Dr. Mukaramah Harun
School of Economics, Finance and Banking, UUM COB, Universiti Utara Malaysia, Malaysia.

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