TOTAL FACTOR PRODUCTIVITY GROWTH IN MALAYSIAN MANUFACTURING SECTOR: EMPHASIS ON HEAVY INDUSTRIES
Fatimah Saida, Saad Mohd. Saidb
Abstract
Fatimah Saida, Saad Mohd. Saidb
Abstract
This study utilizes the standard growth accounting model to estimate Total Factor Productivity (TFP) growth for Malaysian manufacturing industries during 1982-1997 which includes two cyclical sub-periods 1982-1986 and 19871997. The estimates show high TFP growth among the heavy industries as compared to the medium and light industries. The average TFP growth for the manufacturing sector as a whole was found to be negative during 1982-1986. However, it improved in the second sub-period of 1987-1997 and recorded positive annual growth of 4.05 percent. This improvement presumably reflects to some extent the success of government policy changes which have taken place since 1985. Still, the growth of the Malaysian manufacturing sector was governed by the input-driven growth rather than the productivity-driven growth. JEL classification: D24
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This study utilizes the standard growth accounting model to estimate Total Factor Productivity (TFP) growth for Malaysian manufacturing industries during 1982-1997 which includes two cyclical sub-periods 1982-1986 and 19871997. The estimates show high TFP growth among the heavy industries as compared to the medium and light industries. The average TFP growth for the manufacturing sector as a whole was found to be negative during 1982-1986. However, it improved in the second sub-period of 1987-1997 and recorded positive annual growth of 4.05 percent. This improvement presumably reflects to some extent the success of government policy changes which have taken place since 1985. Still, the growth of the Malaysian manufacturing sector was governed by the input-driven growth rather than the productivity-driven growth. JEL classification: D24
Key concepts: Total factor productivity, Manufacturing sector, Productivity, Manufacturing, Growth accounting, Economics, Business, Labour economics