Plant Size, Turnover and Productivity in Malaysian Manufacturing

Malaysian manufacturing has an asymmetrical structure: small and medium-sized enterprises dominate in numbers, but contribute relatively little to total output, employment, and exports as compared to their larger counterparts. In light of an increasingly competitive environment arising from globalization, a sound knowledge of turnover patterns within the sector by plant size and its potential impact on aggregate productivity growth is imperative. We find that turnover, particularly of large plants, makes a substantial contribution to overall productivity growth in manufacturing. Hence, from a policy perspective, facilitating turnover might be as important as supporting existing plants in promoting aggregate productivity growthPlant turnover; plant size; productivity; manufacturing; Malaysia

Turnover, Ownership and Productivity in Malaysian Manufacturing

Applying Foster, Haltiwanger and Krizan‟s (1998) decomposition of productivity growth method to Malaysian manufacturing census data for 2000 and 2005, we analyse if firm turnover by ownership (domestic versus foreign) has any impact on the sector‟s aggregate productivity growth. The findings show that turnover matters regardless of ownership but, more importantly, attracting foreign direct investment inflows could induce positive „net entry effect‟. The manufacturing sector‟s heavy dependence on FDI is underscored by the significant contribution of large MNCs to export value. Foreign entrants also have an important positive impact on sector productivity. The analysis shows that large-sized foreign and domestic entrants are more productive than medium-sized and especially small-sized ones. Among survivors, large foreign and domestic establishments fare the worst. Mediumsized domestic survivors, on the other hand, contribute the most to boosting sector productivity. The study demonstrates the usefulness of such an analytical framework by drawing out important implications for state industrial policies based on ownership and firm size.Ownership, firm turnover; productivity; manufacturing; Malaysia

Government Expenditure And National Income: Causality Tests For Five South East Asian Countries

This study aims to determine the direction of causality between national income and government expenditures for Indonesia, Malaysia, Philippines, Singapore, and Thailand. Granger causality tests are used to investigate the causal links between the two variables. Times series data covering last four decades are used. Support for the hypothesis that causality runs from government expenditures to national income has been found only in the case of Philippines. There is no evidence for this hypothesis and its reverse for the other countries

Does Exporter Turnover Contribute to Aggregate Productivity Growth? Evidence from Malaysian Manufacturing.

Malaysia’s economic success is to a significant extent underpinned by its export-oriented manufacturing sector. The sector has a large foreign presence, with MNCs attracted by the open trade and investment regime, and FDI-friendly policies. Using unpublished manufacturing census data for 2000 and 2005, we apply the methodology by Foster et al. (1998) to decompose productivity growth. The analysis shows that exporters were more productive than domestic-oriented establishments, and were distinctly more competitive. The empirical evidence also shows that establishment turnover is important in boosting productivity growth. In particular, we find that turnover of exporters made a larger contribution to aggregate productivity growth compared to domestic-oriented establishments during the period from 2000 to 2005. Surviving establishments (those that operated in both years), on the other hand, made a negative contribution. It is noteworthy that entrants to export markets were more productive than surviving non-exporters and even surviving exporters. Exiters from export markets or “export failuresâ€, on the other hand, were less productive than continuing exporters. Given the importance of turnover to productivity growth, the government should ensure unrestricted entry to the export sectors for both foreign and domestic investors. Continuing with pro-FDI policies is also important, given the keener global competition.Exporting; plant turnover; productivity; manufacturing; Malaysia

Firm size and job creation: evidence from Turkey

This study examines the relationship between firm size and job creation by using an extensive data set covering all non-farm Turkish businesses with 20 or more employees from 2003 to 2010. We find that small firms (firms with employees between 20 and 100 employees) have higher mean job flow rates (job creation, job destruction and net job creation rates) than large firms. Firm size and job flow rates are inversely related, and this relationship is especially prominent for firms with 50 employees or more. Although the overall pattern observed is also observed in both sectors, job creation rates in services are higher than the ones in manufacturing. The magnitudes of job destruction rates are comparable across sectors. Higher job creation rate in services but comparable job destruction rate results in higher net job creation rate in services. As for shares, only for smaller firms (20-49 and 50-99 size categories), job creation shares are greater than their shares in employment. But these firms have disproportionate job destruction shares as well. We also find that only the 20-49 category firms contribute to net job creation more than their share in employment. The smaller firms have high disproportionate shares in job creation and destruction in manufacturing and services as well

Effect of Supplemental Irrigation on Lentil Yield and Growth in Semi-Arid Environment

Lentil is one of the most promising legume crops providing nutritional and food assurance to human beings. Due to extensive production of lentil crop in rain-fed agriculture system, its growth and yield are mainly determined by the levels of precipitation. Consequently, it usually faces drought stress during the generative stage resulting in low yield. In such scenario, controlled supplemental irrigation (SI) can improve and stabilize the productivity. Therefore, the present study was conducted to determine the effect of supplemental irrigation on the growth and yield of lentil crop under semi-arid climate conditions of Turkey. An experiment was performed during two consecutive crop seasons at Sanliurfa, Turkey with annual mean rainfall of 196 and 275 mm in the first and second experimental year, respectively. Six supplementary irrigation treatments were given using drip irrigation system [no supplement irrigation (I0), 25% (I25), 50% (I50), 75% (I75), 100% (I100, full irrigation) and 125% (I125) supplement irrigation depending on the available soil water content]. Results obtained in the study indicated that in both study years, highest biomass, harvest index and grain yield values were obtained from fully irrigated treatments (I100), while non-supplementary irrigated treatments have provided lowest values. It should be clearly noticed that growth parameters including yield were lower under over-irrigation treatment (I125). Hence, it is recommended that farmers need to optimize the supplemental irrigation technique to obtain desired yields. This study will support the successful usage of the supplemental irrigation technology to improve lentil productivity, particularly under semi-arid environment

Board Remuneration, Company Performance, and Corporate Governance: Evidence from Publicly Listed Malaysian Companies

Corporate governance is hotly debated in Malaysia and elsewhere in the Asian-Pacific region. The reason for this is that several of the problems that Asian-Pacific countries faced during the crisis of 1997-1999 are blamed on weak corporate governance structures. In this study we examine the determinants of Board compensation in Malaysian companies listed on the Kuala Lumpur Stock Exchange over the period 1989 to 2000. Our objective is to examine whether corporate governance affects the relationship between performance and remuneration. We find evidence of a statistically significant positive relationship between Board remuneration and sales turnover and a statistically significant negative relationship between Board remuneration and ownership concentration. However, the relationship between Board remuneration and firm performance is ambiguous, while there is no evidence of a significant relationship between Board remuneration and sector performance

Firm size and job creation: evidence from Turkey

This study examines the relationship between firm size and job creation by using an extensive data set covering all non-farm Turkish businesses with 20 or more employees from 2003 to 2010. We find that small firms (firms with employees between 20 and 100 employees) have higher mean job flow rates (job creation, job destruction and net job creation rates) than large firms. Firm size and job flow rates are inversely related, and this relationship is especially prominent for firms with 50 employees or more. Although the overall pattern observed is also observed in both sectors, job creation rates in services are higher than the ones in manufacturing. The magnitudes of job destruction rates are comparable across sectors. Higher job creation rate in services but comparable job destruction rate results in higher net job creation rate in services. As for shares, only for smaller firms (20–49 and 50–99 size categories), job creation shares are greater than their shares in employment. But these firms have disproportionate job destruction shares as well. We also find that only the 20–49 category firms contribute to net job creation more than their share in employment. The smaller firms have high disproportionate shares in job creation and destruction in manufacturing and services as well

External Scale Economies in Turkish Manufacturing Industries

In this study, the relationship between external scale economies (agglomeration economies) and productivity is measured by using Turkish data. The productivity increase can be due to economies from locating closer to other firms in either the same industry (localisation economies) or different industries (urbanisation economies). Localisation economies are proxied by own industry size and urbanisation economies by city population. Productivity (output per worker) is regressed on industry size, city population, and other related variables. A measure of concentration of state enterprises is included in the regressions to control for the possible inefficiencies in public sector firms. The functional form of the estimating equations is derived from the translog production function. As a check, a constant elasticity of substitution (CES) form is also experimented with. Data are cross-section data and come from industrial and production surveys conducted by the State Institute of Statistics of Turkey in 1985. The study finds that agglomeration economies that are robust across different specifications of the agglomeration economy function and production function exist in food products, textiles, and wood products. Urbanisation economies are detected in food products and textiles. In wood products there are localisation economies.