Bumiputera Commercial and Industrial Community in the Food‐processing Industry: An Analysis of Institutional Support

The economic crisis of 1997 necessitates a rethinking of the way Malaysia manages its economy. The call for a re‐examination of the government's role in the economy necessitates an analysis of the government's past economic performance. This paper analyses the impact of a particular Malaysian government's policy, namely the creation of a Bumiputera Commercial and Industrial Community (BCIC). For purposes of analysis, this paper focuses on BCIC development in the food‐processing industry. The government has provided various support (such as, marketing, skill‐upgrading, technology) to Bumiputera in the food‐processing industry. This study uses a discriminant analysis to distinguish the characteristics of institutional support beneficiaries from those of non‐beneficiaries. The results of the study show that Bumiputera entrepreneurs who received and those who do not receive institutional supports, differ significantly in six characteristics. The six characteristics are entrepreneurs' level of education, their need‐for‐achievement, locus of control, communicative behaviour, firms' productivity, and level of process innovation. This study shows that those who have received institutional supports tend to have higher entrepreneurial qualities and firms that received institutional supports were more productive and innovative.