Abstract:

This paper makes an attempt to examine the patterns of financing strategies of Government-Linked Companies (GLCs) and Non- Government-Linked Companies (GLCs). The paper focuses on the applicability of the pecking order model on the listed GLCs and NGLCs. Relevant hypotheses are developed to test on their financing patterns with the use of appropriate variables and measures. Two different samples are incorporated in the study; 31 GLCs and 298 NGLCs that are both in a balanced form measured by total market capitalization. This empirical work uses financial data of both groups gathered over the period 1999 to 2008. Econometrics methodology on panel data analysis is rigorously used for hypothesis testing. Results indicate that GLCs do show evidence of the adoption of pecking order model as compared to NGLCs.