Government Subsidisation and Shareholder Wealth Impact: Evidence from Malaysia

This paper investigates the shareholder wealth impact of government investment in listed companies (and by extension, subsidisation those companies), using data from Malaysia. We distinguish two overlapping categories government-related investors: whose principal mission relates to economic policy and social policy. The methodology entails Ordinary Least Squares regressions. There are dependent variables measuring management success at generating wealth: an intrinsic value surrogate return on equity. final sample comprises 1732 company–year observations investigation period 2011–2014. evidence indicates that subject a investor with (economic) more (less) successful than without any shareholding all. findings indicate for ownership investors related policy, subsidies wealth-enhancing, diminishing marginal returns beyond threshold level shareholding. research design reflects adaptations Malaysian institutional setting via choice control usage leading equity analyst.