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Globalisation and Labour Productivity in the Malaysian Manufacturing Sector

Author

Listed:
  • 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.

Suggested Citation

  • Rahmah Ismail & Aliya Rosa & Noorasiah Sulaiman, 2012. "Globalisation and Labour Productivity in the Malaysian Manufacturing Sector," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 76-86, May.
  • Handle: RePEc:bap:journl:120207
    as

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    References listed on IDEAS

    as
    1. 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 32, Faculty of Economics and Business Administration, University of Tartu (Estonia).
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    6. 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, vol. 33(2), pages 211-227.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Globalisation; Labour productivity; Manufacturing sector;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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