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Performance of the MSMEs Manufacturing Sector in Malaysia: An Overview

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  • Nor Azian Abdul Rahman
  • Zulhasni Abdul Rahim

Abstract

Micro, Small, and Medium Enterprises (MSMEs) form the backbone of Malaysia’s economy, accounting for nearly 97% of business establishments and contributing 39.1% to the GDP in 2023 (SME Corp Malaysia, 2024). This study provides a comprehensive review of the performance of the Malaysian MSME sector. This study synthesizes recent statistical data and empirical studies to explore MSMEs’ contributing factors, MSMEs establishment by size and sector, state, value of MSMES GDP and overall GDP, number and annual percentage change of employment, MSMEs’ employment by type of economic activity, value and annual percentage change of labor productivity, and ongoing challenges faced by MSMEs. In addition, this study discusses government policy and support, as well as the impact of technological adoption among MSMEs in Malaysia. Furthermore, this study highlights the overall performance of MSMEs in the manufacturing sector and their determinants. The key determinants include technological capability, managerial competence, financial access, supply chain integration, and government support. In conclusion, to enhance MSME performance, policymakers must streamline access to government support and incentivize digital transformation. These strategies will help manufacturing MSMEs become more resilient and competitive.

Suggested Citation

  • Nor Azian Abdul Rahman & Zulhasni Abdul Rahim, 2025. "Performance of the MSMEs Manufacturing Sector in Malaysia: An Overview," Information Management and Business Review, AMH International, vol. 17(3), pages 282-291.
    • Handle: RePEc:rnd:arimbr:v:17:y:2025:i:3:p:282-291
    DOI: 10.22610/imbr.v17i3(I).4664
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    References listed on IDEAS

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    2. Laitinen, Erkki K., 2002. "A dynamic performance measurement system: evidence from small Finnish technology companies," Scandinavian Journal of Management, Elsevier, vol. 18(1), pages 65-99, March.
    3. Chen, Lujie & Feldmann, Andreas & Tang, Ou, 2015. "The relationship between disclosures of corporate social performance and financial performance: Evidences from GRI reports in manufacturing industry," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 445-456.
    4. Mei Kay Loo & Sridar Ramachandran & Raja Nerina Raja Yusof, 2023. "Unleashing the potential: Enhancing technology adoption and innovation for micro, small and medium-sized enterprises (MSMEs)," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2267748-226, October.
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