Abstract
On the basis of the case study of the selected government-linked companies (GLCs), this paper examines the technological stock progress and further assesses its implication for growth. A synthesized framework of analysis (using technological stock and logistic growth function) is proposed to highlight the virtuous cycle between R&D investment, technology stock and growth. The results suggest that two of the selected firms (Proton and Golden Hope), indeed, showed better technological progress. However, Proton seems to achieve the maturity stage of technology and further needs to enhance its technology capability to drive its performance in the future. In contrast, TNB is found to lack the technological development to promote performance. The results, on the one hand, suggest that technology development is mostly progressive with high returns in the areas where the country has definite comparative advantage (e.g. oil palm) and when better partnership exists. On the other hand, in a highly protective market, the technological progress is slow – the case of energy sector – and contribution of technology progress towards growth is in lack – as in the case of automotive sector. Case comparison suggests that attempts to develop technology require competitive market with less government protective measures.
Highlights
The renewed interest in political economy in the forms of institutional role (North 1990; Nelson 2005) that shapes the firm’s conduct and performance is an emerging field in the current trends of economy analysis (Adam, Dercon 2009)
We discussed the results of the technological stock of the selected government-linked companies (GLCs) obtained from the fitted models and how they correlated with firm performance
With oil palm technology being in the frontier in Malaysia, this industry has benefited from the assistance of Palm Oil Research Institute of Malaysia (PORIM) and the Malaysian Palm Oil Board
Summary
The renewed interest in political economy in the forms of institutional role (North 1990; Nelson 2005) that shapes the firm’s conduct and performance is an emerging field in the current trends of economy analysis (Adam, Dercon 2009). Technological and Economic Development of Economy, 2012, 18(2): 248–261 the importance of government intervention policies in assessing the economic development. In many Asian countries, government intervention is more than just institutional setting that facilitates industrial development. The dual role of the government, controlling state (control and regulate private sectors) as well as producing state (directly producing by enacting suitable economic policies), is imperative for economic performance of these countries. Government sets up group of government-linked companies (GLCs) or state owned enterprises (SOE) and actively charts economic development in the respective economy (Nolan, Xiaoqiang 1999; Feng et al 2004; Ang, Ding 2006; Lin, Su 2009). In the era of globalization, improving the competiveness of the GLCs is important for future growth of these nations due to the heavy reliance of state producing approach. In specific, improving the most important source of competitiveness, technological progress, is crucial for the progress of GLCs (Girma et al 2009) and indirectly for the nation as a whole
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