Does Exporter Turnover Contribute to Aggregate Productivity Growth? Evidence from Malaysian Manufacturing
AbstractMalaysiaâ€™s economic success is to a significant extent underpinned by its export-oriented manufacturing sector. The sector has a large foreign presence, with MNCs attracted by the open trade and investment regime, and FDI-friendly policies. Using unpublished manufacturing census data for 2000 and 2005, we apply the methodology by Foster et al. (1998) to decompose productivity growth. The analysis shows that exporters were more productive than domestic-oriented establishments, and were distinctly more competitive. The empirical evidence also shows that establishment turnover is important in boosting productivity growth. In particular, we find that turnover of exporters made a larger contribution to aggregate productivity growth compared to domestic-oriented establishments during the period from 2000 to 2005. Surviving establishments (those that operated in both years), on the other hand, made a negative contribution. It is noteworthy that entrants to export markets were more productive than surviving non-exporters and even surviving exporters. Exiters from export markets or â€œexport failuresâ€, on the other hand, were less productive than continuing exporters. Given the importance of turnover to productivity growth, the government should ensure unrestricted entry to the export sectors for both foreign and domestic investors. Continuing with pro-FDI policies is also important, given the keener global competition.
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Bibliographic InfoPaper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 55-10.
Length: 37 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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Other versions of this item:
- Ergun Dogan & Koi Nyen Wong & Michael M. C. Yap, 2011. "Does Exporter Turnover Contribute to Aggregate Productivity Growth? Evidence from Malaysian Manufacturing," The World Economy, Wiley Blackwell, vol. 34(3), pages 424-443, 03.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-06 (All new papers)
- NEP-DEV-2010-11-06 (Development)
- NEP-EFF-2010-11-06 (Efficiency & Productivity)
- NEP-FDG-2010-11-06 (Financial Development & Growth)
- NEP-SEA-2010-11-06 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-83, April.
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