Firm Ownership and Technical Efficiency: Production Frontier Analysis of Malaysian Manufacturing

Authors

  • Sharmila Suntherasegarun Investment Statistics Division, Malaysian Investment Development Authority (MIDA), MIDA Sentral, No 5, Jalan Stesen Sentral 5, KL Sentral, 50470 Kuala Lumpur, Malaysia
  • Evelyn S. Devadason Department of Economics and Applied Statistics, Faculty of Business and Economics, Universiti Malaya, 50603 Kuala Lumpur, Malaysia.

DOI:

https://doi.org/10.22452/IJIE.vol15no1.3

Keywords:

Stochastic frontier analysis, Technical efficiency, Firm ownership, Manufacturing, Malaysia

Abstract

Using a new micro-based dataset of 8,472 firms covering 19 industries, this paper employs a stochastic production frontier analysis to compare time-varying technical efficiencies of foreign firms vis-à-vis local firms for the 2014 to 2019 period. The empirical findings indicate that on average, foreign firms are only marginally more (technically) efficient  than  local  firms  even  after  controlling  for  other  firm  characteristics.  The productivity levels between foreign firms and local firms are also somewhat comparable for ‘catalytic’ industries, electrical and electronics, machinery, and chemicals. Together these results confirm that the high productivity gaps between the foreign firms and local firms in the Malaysian manufacturing sector seem to be a thing of the past.

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Published

2023-01-01

How to Cite

Sharmila Suntherasegarun, & Evelyn S. Devadason. (2023). Firm Ownership and Technical Efficiency: Production Frontier Analysis of Malaysian Manufacturing. Institutions and Economies, 45–74. https://doi.org/10.22452/IJIE.vol15no1.3

Issue

Volume 15, Issue 1 (2023)

Section

Articles

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