Can state-owned holding (SOH) companies improve SOE performance in Asia? Evidence from Singapore, Malaysia and China

The establishment of an independent state-owned holding (SOH) company intends to separate political influence from state-owned enterprises (SOEs). While its role may work neatly in theory whether the government intervenes in the operation of SOH companies and whether the overall environment has capacity to support an SOH system is another issue. In this paper, it is noted that an SOH company serves both as an agent and a principal in a two-tiered relationship: Government–SOH and SOH–SOEs. This study argues how the dynamics among the three parties are interwoven affects the overall effectiveness of the SOH and thus the ultimate performance improvement of SOEs. We illustrate this by introducing typologies for three types of SOH in three Asian countries. In the process, we show that although institutional design such as legal framework matters, government’s willingness to enforce it and restrain itself from intervention also plays an important role. Overall, this research makes contribution to SOH and SOE literature by identifying distinctions for SOHs.