International Business Management

Year: 2017
Volume: 11
Issue: 2
Page No. 334 - 341

Globalization and Total Factor Productivity: The Case of the Manufacturing Sector in Malaysia

Authors : Noorasiah Sulaiman, Rahmah Ismail and Mohd Nasir Mohd Saukani

Abstract: This study observes the impact of globalization on the Total Factor Productivity (TFP) performance of the Malaysia’s manufacturing sector. By focusing on the manufacturing sector, this study analyse to what extent the TFP level affected by the globalization. More specifically, this study examines the impact on the TFP among sub sectors of the manufacturing sector. The indicators of globalization under examination comprise of foreign investment, technology, foreign labour and trade’s openness in the economy in such a way to observe trade liberalization. By covering the study period from 1990-2010, the survey data of the industrial manufacturing was obtained from the Department of Statistics Malaysia. The findings indicate that the openness of the economy and foreign direct investment are statistically significant and have positive impact on the TFP level. In contrast, technology agreement and foreign labour are not significant. The findings by sub sectors show that transport equipment industry has significantly and positively influenced the sub sector’s TFP level by all globalization’s variables.

How to cite this article:

Noorasiah Sulaiman, Rahmah Ismail and Mohd Nasir Mohd Saukani, 2017. Globalization and Total Factor Productivity: The Case of the Manufacturing Sector in Malaysia. International Business Management, 11: 334-341.

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