Ownership Structure and Firm Performance in Malaysia

Abstract

This study investigates the relationship between ownership structure and the financial performance of firms in Malaysia, with a particular focus on foreign ownership and government-linked companies (GLCs). Grounded in the principles of agency theory, the research examines whether different ownership structures influence firm performance and contribute to resolving or exacerbating agency conflicts. Using a sample of the top 100 listed companies on Bursa Malaysia, the study employs regression analysis to test the impact of foreign ownership and GLC ownership on firm performance, measured by return on assets (ROA). Audit quality and firm size are incorporated as control variables to enhance the robustness of the model. The findings reveal that ownership structure plays a significant role in shaping financial outcomes, with variations observed between foreign-owned and GLC-affiliated firms. The results are consistent with prior studies in emerging markets, emphasizing the importance of ownership concentration, governance practices, and institutional support in determining firm performance. The study contributes theoretically by reinforcing agency theory in the context of Malaysian corporations, and practically by offering insights for policymakers, investors, and managers in designing ownership strategies that enhance firm value. Limitations of the study include sample size, reliance on secondary data, and restricted time frame, which suggest caution in generalizing the findings. Future research is recommended to expand the sample, integrate qualitative approaches, and consider additional governance variables to deepen understanding of ownership structures in corporate performance.