Performance of State Owned Enterprises in Indonesia and Malaysia

Objective – The purpose of this research is to measure performance of State-owned Enterprises that listed in Bursa Malaysia and Indonesian Stock Exchange. Methodology/Technique – The economic performance will be measured by DEA. This study was employed technical efficiency and Malmquist Productivity Index. Period of this study was conduct from 1992 to 2007, consist of three periods: a) Pre Crisis, b) Crisis, and c) Post Crisis. Findings – For Indonesia's SOEs, the conclusion over the periods of study that the technical efficiency of SOEs improved, especially in period of Crisis, when government injected direct subsidies in order to enable SOEs maintain their performances. Meanwhile, the result for Malaysia's SOEs sample demonstrates that over the periods of study, technical efficiency of SOEs was also improved. The improvement from Pre-crisis to Crisis period was not only due to some enterprises having early recovery compared to others but also government supported SOEs during crisis, by getting lower investment and export financing cost and purchasing and sales preference. Novelty – There is lack of studies on State-owned Enterprises productivity in this region, so this study can fill this research gap and provide a useful reference to policy makers and users. Type of Paper: Empirical