Production linkages, technological intensities and economic performance: Small and medium enterprises in Malaysian manufacturing

Rasiah, R. and Bin Mohamad, M.R. and Sanjivee, P. (2011) Production linkages, technological intensities and economic performance: Small and medium enterprises in Malaysian manufacturing. Asian Journal of Technology Innovation, 19 (2). pp. 279-296.

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Abstract

This paper examines the impact of proximate domestic sourcing on productivity, exports and technological upgrading in small and medium enterprises (SMEs) in electric-electronics, textiles-garments, automotives and wood products industries in Malaysia. The results show that the intensity of backward subcontracting in the domestic economy was important in domestic and export intra-industry purchases. The significant technological variables were that less-integrated firms showed higher intensities than more-integrated firms. Econometric results show that technological intensity is positively correlated with productivity and export-orientation; this infers that technology matters in economic performance. The Probit estimations confirm that domestic supplies matter in labour productivity and export-intensities, but not in technological intensities. Low export-intensities need not discourage technological upgrading if inward-oriented firms operate as subcontractors supplying exporters. Governments should be encouraged to examine the nexus between suppliers, buyers and economic performance to stimulate national inter-firm production synergies to increase competitiveness by domestic firms.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
Depositing User: MR Faizal II H
Date Deposited: 05 Nov 2015 11:13
Last Modified: 05 Nov 2015 11:13
URI: http://eprints.um.edu.my/id/eprint/14572

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