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Contribution of Technical Efficiency Change and Technical Change to Total Factor Productivity Growth in Electrical and Electronics Industry in Malaysia

Jurnal Ekonomi Malaysia

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Title Contribution of Technical Efficiency Change and Technical Change to Total Factor Productivity Growth in Electrical and Electronics Industry in Malaysia
 
Creator Ismail, Rahmah
Zainal Abidin, Syahida
Hajinoor, Mohd Shukri
 
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Description ABSTRACTThe electrical and electronics (ELE) industry contributes more than 60% of Malaysian manufacturing exports. The emergence of trade liberalization through Asian Free Trade Association (AFTA), North American Free Trade Association (NAFTA) and European Unions (EU)creates stiffer trade competition amongst the E&E industry in the region and to be at the competitive edge, this industry must increase its eficiency. In this regards, total factor productivity (TFP) growth becomes relevant.An increase in f g growth through technical eflciency change (TEC) will reduce cost ofproduction and make the industry more competitive because it can produce higher output using same level of inputs. There are two components of TFP growth, namely, technical eficiency change (TEC) and technical change (Tc). The impact of TFP growth on output growth will be more meaningful if contribution of TEC supersedes contribution of TCbecause TEC will not incur additional cost of production. This paper attempts to analyze TFP growth in the E&E industry at five digits of Malaysian Standard Industrial Classi$cation (MSZG). Fifeen types of industries are covered in the analysis. The analysis will be based on theManufacturing Survey data between 1995 and 2003 collected by the Department of Statistics Malaysia. The method of Data Envelopment Analysis (DEA) is utilized to get TEC and TC. The results from this study show that, contribution of TC is higher than that of TEC in all sub industries under study. Nevertheless, trend analysis shows that during 1998 - 2000 period TEC is higher than TC.ABSTRAKlndustri elektrik dun elektronik menyumbang lebih 60% daripada eksport Malaysia. Kewujudan liberalisasi perdagangan seperti AFTA, NAFTA dan Kesatuan Eropah (EU) membawa kepada persainganperdagangan yang hebat di kalangan industri E&E di wilayah ini dan untuk lebih berdaya saing, industri ini perlu meningkatkan kecekapan masing-masing. Dalam hubungan ini, pertumbuhan produktiviti faktorkeselumhan (TFP) menjadipenting. Peningkatan dalampertumbuhan TFP melahi perubahan kecekapan teknikal (TEC) akan menurunkan kos pengeluaran dan rnenjadikan industri lebih berdaya suing kerana dapatmengeluarkan lebih banyak output dengan menggunakan jumlah input yang sama. Terdapat dua komponen pertumbuhan TFP, iaitu perubahan kecekapan feknikal (TEC) dan perubahan teknikal (TC). Sumbanganpertumbuhan TFP terhadap pertumbuhan ekonomi menjadi lebih bermakna sekiranya sumbangan TEC melebihi sumbangan TC kerana TEC tidak melibatkan kos pengeluaran tambahan. Kertas ini cuba menganalisispertumbuhan TFP dalam industri E&E pada 5 digit MsIC. Terdapat lima belas jenis sub industri E&E. Data yang digunakan dalam analisis ini adalah Penyiasatan Industri Pernbuatan 1995-2003 dari Jabatan Pertangkaan Malaysia. Pendekatan DEA digunakan dalam mendapatkan nilai TEC dan Tc. Hasil kajian ini rnenunjukkan sumbangan TC adalah lebih tinggi daripada TEC dalam semua sub industri yang dikaji. Walaubagaimanapun, analisis trend rnenunjukkan antara tahun 1998 - 2000, TEC lebih tinggi daripada TC.
 
Publisher Universiti Kebangsaan Malaysia
 
Contributor —
 
Date 2007-12-31
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://ejournal.ukm.my/jem/article/view/1589
 
Source Jurnal Ekonomi Malaysia; Vol 41 (2007): Jurnal Ekonomi Malaysia
0126-1962
 
Language eng
 
Relation http://ejournal.ukm.my/jem/article/view/1589/1374
 
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