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The Relationship Between Innovation, Productivity and Exports: Some Preliminary Evidence from the Malaysian Manufacturing Sector


  • Cassey Lee

    () (University of Nottingham Malaysia Campus)


The objective of this paper is to empirically examine the relationship between innovation, productivity and trade intensity using firm-level data from the Malaysian manufacturing sector. Evidence from this paper suggests the relationships between innovation, productivity and exports is a complex one. Exporting and industry technological characteristics may influence the decision to undertake R&D but has no effect on R&D expenditure. Only firm size has impact on both the decision and expenditure on R&D. Variables such as R&D expenditure, firm size, exports and local ownership influences the propensity to innovate, be it product or process innovation. Product innovation is negatively related to productivity while process innovation is positively related to productivity.

Suggested Citation

  • Cassey Lee, 2008. "The Relationship Between Innovation, Productivity and Exports: Some Preliminary Evidence from the Malaysian Manufacturing Sector," Economics Bulletin, AccessEcon, vol. 12(31), pages 1-13.
  • Handle: RePEc:ebl:ecbull:eb-08l00009

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    References listed on IDEAS

    1. Shea, John S, 2002. "Complementarities and Comovements," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(2), pages 412-433, May.
    2. Luís M B Cabral & José Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
    3. Mario Forni & Marc Hallin & Marco Lippi & Lucrezia Reichlin, 2000. "The Generalized Dynamic-Factor Model: Identification And Estimation," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 540-554, November.
    4. Lucia Alessi & Matteo Barigozzi & Marco Capasso, 2006. "A Dynamic Factor Analysis of Business Cycle on Firm-Level Data," LEM Papers Series 2006/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Gaffeo, Edoardo & Gallegati, Mauro & Palestrini, Antonio, 2003. "On the size distribution of firms: additional evidence from the G7 countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 117-123.
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    Cited by:

    1. Cassey Lee & Dionisius Narjoko, 2015. "Escaping the Middle-Income Trap in Southeast Asia: Micro Evidence on Innovation, Productivity, and Globalization," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(1), pages 124-147, January.

    More about this item

    JEL classification:

    • L0 - Industrial Organization - - General
    • L6 - Industrial Organization - - Industry Studies: Manufacturing


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