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ID: 156967

Do state-owned enterprises crowd out private investment?: firm level evidence from Malaysia / Menon, Jayant ; Ng, Thiam Hee

Menon, Jayant	Journal Article
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Summary/Abstract

Private investment in Malaysia has been sluggish since the Asian Financial Crisis. One explanation is that the growing presence of state-owned enterprises (SOEs) or government-linked corporations (GLCs) has been crowding out private investment. For the first time, we provide empirical evidence on the relationship between GLC presence and private investment, employing a unique database covering 443 firms between 2007 and 2011. We find that when GLCs are dominant in an industry, investment by private firms is significantly negatively affected. Conversely, when GLCs do not dominate an industry, the impact on private investment is not seen. Sensitivity tests associated with varying the level of the threshold used to determine dominance confirm the robustness of the results. To revive private investment in Malaysia, the government must not only redress its growing fiscal deficit, but also expedite its programme of divestment.

Key Words

State-Owned Enterprises ; Crowd Out ; Private Investment ; Firm Level Evidence From

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ID: 177380

Evaluating consumer investments in distributed energy technologies / Gissey, Giorgio Castagneto

Gissey, Giorgio Castagneto	Journal Article
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Summary/Abstract

The adoption of solar photovoltaic and electrical energy storage by end users depends on their economic attractiveness, which is typically assessed with metrics of future cash flow such as Net Present Value (NPV). Yet analyses using NPV typically do not account for the evolution towards low-carbon electricity systems in the short and long term. We show this to be of critical importance for accurately calculating the profitability of these technologies.

Key Words

Feasibility Study ; Private Investment ; Prosumer

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ID: 182594

Informal political coalitions and private investment in China / Liu, Jingnan

Liu, Jingnan	Journal Article
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Summary/Abstract

This article attempts to estimate the effects of informal political coalitions on China's private investment. Theoretically, the party-state clients of China's supreme leaders are expected to have stronger incentives to foster economic growth. One way of doing so is to encourage private investment by reducing its political risks. Analysis of provincial-level panel data from 1993 to 2017 shows that personal connections—based on shared experience in the same work unit—between provincial leaders and the Chinese Communist Party's incumbent supreme leader significantly increase the growth rate of private investment. This suggests that informal institutional relations may assist the development of China's private economy by partially compensating for the weaknesses of formal rule-of-law institutions.

Key Words

Corruption ; Informal Institutions ; Factions ; Private Investment ; Personal Connections

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