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Turnover, Ownership and Productivity in Malaysian Manufacturing


  • Ergun Dogan
  • Koi Nyen Wong
  • Michael Meow-Chung Yap


Applying Foster, Haltiwanger and Krizan‟s (1998) decomposition of productivity growth method to Malaysian manufacturing census data for 2000 and 2005, we analyse if firm turnover by ownership (domestic versus foreign) has any impact on the sector‟s aggregate productivity growth. The findings show that turnover matters regardless of ownership but, more importantly, attracting foreign direct investment inflows could induce positive „net entry effect‟. The manufacturing sector‟s heavy dependence on FDI is underscored by the significant contribution of large MNCs to export value. Foreign entrants also have an important positive impact on sector productivity. The analysis shows that large-sized foreign and domestic entrants are more productive than medium-sized and especially small-sized ones. Among survivors, large foreign and domestic establishments fare the worst. Mediumsized domestic survivors, on the other hand, contribute the most to boosting sector productivity. The study demonstrates the usefulness of such an analytical framework by drawing out important implications for state industrial policies based on ownership and firm size.

Suggested Citation

  • Ergun Dogan & Koi Nyen Wong & Michael Meow-Chung Yap, 2010. "Turnover, Ownership and Productivity in Malaysian Manufacturing," Monash Economics Working Papers 13-10, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2010-13

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    References listed on IDEAS

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    7. Rasiah, Rajah, 2003. "Foreign ownership, technology and electronics exports from Malaysia and Thailand," Journal of Asian Economics, Elsevier, vol. 14(5), pages 785-811, October.
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    More about this item


    Ownership; firm turnover; productivity; manufacturing; Malaysia;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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