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SME Innovation in the Malaysian Manufacturing Sector

  • Cassey Lee


    (The University of Nottingham Malaysia Campus)

  • Lee Chew ging


    (Nottingham University Business School, The University of Nottingham Malaysia Campus)

This paper examines the determinants of innovation amongst small and medium enterprises in the Malaysian manufacturing sector using firm-level data. For small-sized firms, younger firms are more likely to innovate compared to older firms. However, for medium-sized and large-sized firms, older firms are more likely to innovate. The extent of foreign ownership is not an important determinant of innovation. Small-sized firms with more employees are more likely to innovate. Medium-sized firms that produce for domestic market tend to be more innovative. In terms of ownership structure, medium-sized firms that are public limited companies are less likely to innovate. The relationship between technological characteristics of industry and firms' likelihood to innovate appear to be complex. Higher market concentration is associated with higher probability to innovate for medium-sized firms.

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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 12 (2007)
Issue (Month): 30 ()
Pages: 1-12

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Handle: RePEc:ebl:ecbull:eb-07l60001
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  1. Secondo Rolfo & Giuseppe Calabrese, 2003. "Traditional SMEs and innovation: the role of the industrial policy in Italy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 15(3), pages 253-271, July.
  2. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
  3. Mark N. Harris & Mark Rogers & Anthony Siouclis, 2001. "Modelling Firm Innovation using Panel Probit Estimators," Melbourne Institute Working Paper Series wp2001n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  4. Petri Rouvinen, 2002. "Characteristics of product and process innovators: some evidence from the Finnish innovation survey," Applied Economics Letters, Taylor & Francis Journals, vol. 9(9), pages 575-580.
  5. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
  6. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
  7. Lee, Cassey, 2004. "The Determinants of Innovation in the Malaysian Manufacturing Sector: An Econometric Analysis at the Firm Level," Centre on Regulation and Competition (CRC) Working papers 30670, University of Manchester, Institute for Development Policy and Management (IDPM).
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