Technical Components of Total Factor Productivity Growth in Malaysian Manufacturing Industry

Mustapha, Nik Hashim Nik; Hashim, Nik Mohd Hazrul Nik; Yacob, Ridzuan

doi:10.4236/am.2013.49169

Cited by 10 publications

(5 citation statements)

References 6 publications

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“…A study on the TE of the food manufacturing industry in Malaysia by Nik Hashim and Basri (2004) found that the level of TE of the food manufacturing industry in the country is low, a similar finding to that of Ismail (2009). Therefore, the latest research on the level of TE and the determinants of technical inefficiency of electrical and electronic manufacturing firms using corporate-level data should be undertaken to increase the productivity of the industry in the future.…”

Section: Literature Reviewsupporting

confidence: 52%

Measuring the Technical Efficiency of Food Manufacturing Industry in Malaysia

Fahmy-Abdullah¹,

AZIZAN²

2021

JBSD

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Malaysia's Third Industrial Master Plan (IMP3) for the years 2006-2020 reported that the food manufacturing industry is generally less prone to economic change and recorded 17.5% increase in 5 consecutive years. This study identifies the level of technical efficiency (TE) and analyzing the factors that determine the technical inefficiency for food manufacturing in Malaysia involving a total of 1,569 firms using Stochastic Frontier Analysis (SFA). The determining factors such as the capital-labour ratio, employee training expenditure, secondary and tertiary education standards, wage rates, information and communications technology (ICT) costs, and firm size. The SFA results indicate that the TE level of food manufacturing companies in Malaysia is 0.779, which is a high level. Additionally, the capital-labour ratio, employee training expenditure, secondary and tertiary education standards, wage rates and ICT costs are significant determining factors of the inefficiency of food manufacturing firms. However, the size of the manufacturing company was found to be an insignificant factor in determining the increased efficiency of food manufacturing companies. These results indicate that food manufacturers need to increase investment in human capital and ICT and motivate employees by raising wage rates and improving the use of capital appropriate to the level of technology.

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Section: Literature Reviewsupporting

confidence: 52%

Measuring the Technical Efficiency of Food Manufacturing Industry in Malaysia

Fahmy-Abdullah¹,

AZIZAN²

2021

JBSD

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“…However, studies, such as Sulaiman (2012), Mustapha et al (2013) and Ismail and Abidin (2017), have used data at the industry level. In addition, research on the determinants of technical inefficiencies has also been overlooked to measure efficiency as stated by Mahadevan (2002a), Mahadevan (2002b), Mahadevan (2002c) and Said et al (2004).…”

Section: Literature Reviewmentioning

confidence: 99%

Technical Efficiency in Malaysian Manufacturing Firms: A Stochastic Frontier Analysis Approach

Fahmy-Abdullah¹,

Sieng²,

Isa³

2021

JSSM

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Liberalisation challenges, such as those that arise with the establishment of the ASEAN Free Trade Area (AFTA) and elimination of trade barriers, have led to competition among local and foreign manufacturers, requiring Malaysian manufacturing companies to achieve high productivity to address the emergence of new operations by increasing their industrial efficiency and performance. This article aims to measure the level of technical efficiency and analyse the factors that contribute to technical inefficiency in the Malaysian manufacturing industry in 2015. This study uses data from 8,653 firms based on the latest census (2015) obtained from the Statistics Department using the Stochastic Frontier Analysis (SFA). Based on the results, the companies' overall technical efficiency level was high at 0.812. For the determinants of technical efficiency, it was found that ratio of medium to high level of education, company size, information and communication technology spending, training expenses and wage rates showed a positive relationship with technical inefficiencies. The manufacturing industry needs to focus on investing in human capital and scale economic achievement, and high technology production that will increase the technical efficiency level of companies and employees.

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“…This study mainly focusing on the concept of TFP, which is a measurement based on the economic theory of production. The theory of TFP widens the concept of single factor productivity, which is output per unit input (labor and capital), to more than one factor (Mustapa et al, 2013). The TFP change identifies shifts in the production function caused by underlying economic decisions and activities.…”

Section: Introductionmentioning

confidence: 99%

Does country governance and bank productivity Nexus matters?

Kamarudin

Anwar

Nassir

et al. 2020

JIMA

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Purpose This study aims to examine the impact of country governance and other potential bank-specific characteristics and macroeconomic condition determinants on bank productivity in the period of 2006–2016. Design/methodology/approach The productivity level of total 167 banks selected from Malaysia, Indonesia, Brunei and Singapore are evaluated using the data envelopment analysis-based Malmquist productivity index method. A panel regression analysis framework based on ordinary least squares, a fixed effect and a random effect models then are used to identify its main determinants. Findings The empirical findings indicate that the total factor productivity changes of Islamic banks is higher than conventional banks. The liquidity and global financial crisis influence both banks’ productivity. Bank size, credit risk, market power, management efficiency and inflation merely influence Islamic banks’ productivity. On the country governance dimensions, voice and accountability are found to positively influence both banks’ productivity. Regulatory quality and rule of law (RL) significantly influences the conventional parts. Political stability and absence of violence, government effectiveness, RL and control of corruption negatively influence the banks’ productivity, but this influence is only significant for the Islamic banks. Originality/value Country governance has received surprisingly little attention in the banking industry over the past few decades. Majority of the studies that examine the effect of governance on bank performance have focused more on the micro governance dimension. Thus, to the best of the researcher’s knowledge, no study has been done to address the effect of country governance on the productivity of the Islamic and conventional banks.

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Technical Components of Total Factor Productivity Growth in Malaysian Manufacturing Industry

Cited by 10 publications

References 6 publications

Measuring the Technical Efficiency of Food Manufacturing Industry in Malaysia

Measuring the Technical Efficiency of Food Manufacturing Industry in Malaysia

Technical Efficiency in Malaysian Manufacturing Firms: A Stochastic Frontier Analysis Approach

Does country governance and bank productivity Nexus matters?

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