Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry
This paper compares the sources of total factor productivity (TFP) growth of foreign (establishments with 51% and above foreign equity ownership) and local establishments in Malaysia’s automotive sector by applying a stochastic production frontier to a panel of 510 plants for the period 2000-2004. T...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universiti Utara Malaysia
2008
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| Online Access: | https://repo.uum.edu.my/id/eprint/597/1/Noor_Aini_Khalifah.pdf |
| _version_ | 1803624156769550336 |
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| author | Khalifah, Noor Aini Abdul Talib, Basri |
| author_facet | Khalifah, Noor Aini Abdul Talib, Basri |
| author_sort | Khalifah, Noor Aini |
| collection | UUM |
| description | This paper compares the sources of total factor productivity (TFP) growth of foreign (establishments with 51% and above foreign equity ownership) and local establishments in Malaysia’s automotive sector by applying a stochastic production frontier to a panel of 510 plants for the period 2000-2004. The results showed that TFP growth for local automobile plants was minimal at
0.63% and minimally negative at -0.27% for foreign plants. On average,over the study period, technical efficiency changes contributed positively toward TFP growth but scale efficiency changes were negative for both local and foreign establishments. Technical progress was minimally positive for local establishments and minimally negative for foreign establishments.The small size of plants and the lower share of white-collar workers were significant in explaining plant inefficiency in Malaysia’s automobile sector.
A higher capital-labour ratio was positively related to plant inefficiency and this may be due to excess capacity in the automobile sector as a result of a small domestic market. Finally, foreign multinationals are significantly more efficient than locally owned plants. |
| first_indexed | 2024-07-04T05:13:54Z |
| format | Article |
| id | uum-597 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T05:13:54Z |
| publishDate | 2008 |
| publisher | Universiti Utara Malaysia |
| record_format | dspace |
| spelling | uum-5972010-09-29T04:54:26Z https://repo.uum.edu.my/id/eprint/597/ Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry Khalifah, Noor Aini Abdul Talib, Basri TS Manufactures This paper compares the sources of total factor productivity (TFP) growth of foreign (establishments with 51% and above foreign equity ownership) and local establishments in Malaysia’s automotive sector by applying a stochastic production frontier to a panel of 510 plants for the period 2000-2004. The results showed that TFP growth for local automobile plants was minimal at 0.63% and minimally negative at -0.27% for foreign plants. On average,over the study period, technical efficiency changes contributed positively toward TFP growth but scale efficiency changes were negative for both local and foreign establishments. Technical progress was minimally positive for local establishments and minimally negative for foreign establishments.The small size of plants and the lower share of white-collar workers were significant in explaining plant inefficiency in Malaysia’s automobile sector. A higher capital-labour ratio was positively related to plant inefficiency and this may be due to excess capacity in the automobile sector as a result of a small domestic market. Finally, foreign multinationals are significantly more efficient than locally owned plants. Universiti Utara Malaysia 2008 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/597/1/Noor_Aini_Khalifah.pdf Khalifah, Noor Aini and Abdul Talib, Basri (2008) Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry. International Journal of Management Studies (IJMS), 15. pp. 91-113. ISSN 0127-8983 http://ijms.uum.edu.my |
| spellingShingle | TS Manufactures Khalifah, Noor Aini Abdul Talib, Basri Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry |
| title | Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry |
| title_full | Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry |
| title_fullStr | Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry |
| title_full_unstemmed | Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry |
| title_short | Are foreign multinationals more efficient? A stochastic production frontier analysis of Malaysia's automobile industry |
| title_sort | are foreign multinationals more efficient a stochastic production frontier analysis of malaysia s automobile industry |
| topic | TS Manufactures |
| url | https://repo.uum.edu.my/id/eprint/597/1/Noor_Aini_Khalifah.pdf |
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