Turnover, Ownership and Productivity in Malaysian Manufacturing
AbstractApplying Foster, Haltiwanger and Krizanâ€Ÿs (1998) decomposition of productivity growth method to Malaysian manufacturing census data for 2000 and 2005, we analyse if firm turnover by ownership (domestic versus foreign) has any impact on the sectorâ€Ÿs aggregate productivity growth. The findings show that turnover matters regardless of ownership but, more importantly, attracting foreign direct investment inflows could induce positive â€žnet entry effectâ€Ÿ. The manufacturing sectorâ€Ÿs heavy dependence on FDI is underscored by the significant contribution of large MNCs to export value. Foreign entrants also have an important positive impact on sector productivity. The analysis shows that large-sized foreign and domestic entrants are more productive than medium-sized and especially small-sized ones. Among survivors, large foreign and domestic establishments fare the worst. Mediumsized domestic survivors, on the other hand, contribute the most to boosting sector productivity. The study demonstrates the usefulness of such an analytical framework by drawing out important implications for state industrial policies based on ownership and firm size.
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Bibliographic InfoPaper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 13-10.
Length: 40 pages
Date of creation: May 2010
Date of revision:
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Postal: Department of Economics, Monash University, Victoria 3800, Australia
Web page: http://www.buseco.monash.edu.au/eco/
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Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-18 (All new papers)
- NEP-EFF-2010-09-18 (Efficiency & Productivity)
- NEP-ENT-2010-09-18 (Entrepreneurship)
- NEP-SEA-2010-09-18 (South East Asia)
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