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Globalisation and Labour Productivity in the Malaysian Manufacturing Sector

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Author Info

  • Rahmah Ismail

    ()
    (School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia)

  • Aliya Rosa

    ()
    (School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia)

  • Noorasiah Sulaiman

    ()
    (School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia)

Abstract

Globalisation process has forced the Malaysian manufacturing sector to strengthen its ability to compete in the international market. Globalisation, coupled with advancement in information, communication and technology has increased the demand for quality labour, having knowledge and competing to maximise production. The objective of this paper is to analyse the depth of globalisation impact on labour productivity in the Malaysian manufacturing sector. The analysis has used data from the Manufacturing Industrial Survey, Department of Statistics Malaysia comprising 24 years, from 1985 to 2008 and selected six sub-industries. A multiple regression model using panel data is estimated to analyse the relationship between labour productivity using capital-labour ratio, number of labour, foreign direct investment (FDI), foreign labour, economic openness and technology. Findings of the study show that globalisation indicators like FDI and economic openness have negative and significant effect on labour productivity in the manufacturing sector. The dummy period after the year 1995 is positive and significant reflecting that the impact of globalisation on labour productivity in the Malaysian manufacturing sector is higher after the year 1995 as compared to the years prior to 1995.

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Bibliographic Info

Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

Volume (Year): 2 (2012)
Issue (Month): (May)
Pages: 76-86

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Handle: RePEc:bap:journl:120207

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Keywords: Globalisation; Labour productivity; Manufacturing sector;

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  1. Nicholas Apergis & Claire Economidou & Ioannis Filippidis, 2008. "Innovation, Technology Transfer and Labor Productivity Linkages: Evidence from a Panel of Manufacturing Industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 144(3), pages 491-508, October.
  2. Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, Elsevier, vol. 72(1), pages 113-127, May.
  3. Hartmut Egger & Peter Egger, . "International Outsourcing and the Productivity of Low-skilled Labour in the EU," WIFO Working Papers, WIFO 152, WIFO.
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  5. Rajah Rasiah & Geoffrey Gachino, 2005. "Are Foreign Firms More Productive and Export- and Technology-intensive than Local Firms in Kenyan Manufacturing?," Oxford Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(2), pages 211-227.
  6. Simon Roberts & John T. Thoburn, 2004. "Globalization and the South African textiles industry: impacts on firms and workers," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 16(1), pages 125-139.
  7. Harry Bloch & James Ted McDonald, 2000. "Import Competition and Labour Productivity," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2000n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  8. Koirala, Govinda P. & Koshal, Rajindar K., 1999. "Productivity and technology in Nepal:: An analysis of foreign and domestic firms," Journal of Asian Economics, Elsevier, Elsevier, vol. 10(4), pages 605-618.
  9. Priit Vahter, 2004. "The Effect Of Foreign Direct Investment On Labour Productivity: Evidence From Estonia And Slovenia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series, Faculty of Economics and Business Administration, University of Tartu (Estonia) 32, Faculty of Economics and Business Administration, University of Tartu (Estonia).
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