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The Determinants of Innovation in the Malaysian Manufacturing Sector: An Econometric Analysis at the Firm Level

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  • Lee, Cassey

Abstract

Econometric analysis of firm-level data from the recent National Survey of Innovation indicates large firms are more likely to innovate compared to small firms. Ownership structure is also found to be an important determinant of innovation - private limited and public limited firms are twice more likely to innovate compared to soleproprietorship firms. A surprising finding is the negative correlation between the propensity to innovate and the share of exports in sales. There is also no evidence that innovation is related to the extent or foreign vs. local ownership of firms. The findings on the influence of industry-level characteristics are mixed. While the influence of industry's technology level is inconclusive, the propensity to innovate is positively correlated with market concentration.

Suggested Citation

  • 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).
  • Handle: RePEc:ags:idpmcr:30670
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    Cited by:

    1. repec:pid:journl:v:55:y:2016:i:4:p:705-714 is not listed on IDEAS
    2. de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009. "Innovative Firms or Innovative Owners? Determinants of Innovation in Micro, Small, and Medium Enterprises," IZA Discussion Papers 3962, Institute for the Study of Labor (IZA).
    3. Cassey Lee & Lee Chew ging, 2007. "SME Innovation in the Malaysian Manufacturing Sector," Economics Bulletin, AccessEcon, vol. 12(30), pages 1-12.
    4. 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.
    5. Rahmouni, Mohieddine & Ayadi, Mohamed & YIldIzoglu, Murat, 2010. "Characteristics of innovating firms in Tunisia: The essential role of external knowledge sources," Structural Change and Economic Dynamics, Elsevier, vol. 21(3), pages 181-196, August.
    6. Kun-Ming Chen & Shu-Fei Yang, 2013. "Impact of Outward Foreign Direct Investment on Domestic R&D Activity: Evidence from Taiwan's Multinational Enterprises in Low-wage Countries," Asian Economic Journal, East Asian Economic Association, vol. 27(1), pages 17-38, March.
    7. Ho Yeon Kim & Toshitaka Gokan, 2011. "Theories on FDI and the Behavior of MNEs in East Asia," Chapters,in: The Economics of East Asian Integration, chapter 5 Edward Elgar Publishing.
    8. Eric Ramstetter, 2009. "Firm- and Plant-level Analysis of Multinationals in Southeast Asia: the Perils of Pooling Industries and Balancing Panels," Global COE Hi-Stat Discussion Paper Series gd09-106, Institute of Economic Research, Hitotsubashi University.
    9. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, Elsevier.
    10. repec:ebl:ecbull:v:12:y:2007:i:30:p:1-12 is not listed on IDEAS
    11. Yong Sook Lu, 2013. "Book Review: Malaysian Economy: Unfolding Growth and Social Change, by Rajah Rasiah (ed.), Shah Alam: Oxford University Press, 2012, 296 pp," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(1), pages 121-124, April.
    12. Ali Murad Syed & Zahid Riaz & Abdul Waheed, 2016. "Innovation, Firm Performance And Riskiness: Evidence From The Leading Worldwide Innovative Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-19, October.
    13. Cassey Lee, 2007. "Competition Policy in Malaysia," Chapters,in: Competitive Advantage and Competition Policy in Developing Countries, chapter 10 Edward Elgar Publishing.

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