Ismail, Rahmah and Chai, Nyet Fung
Sumbangan productiviti keseluruhan terhadap pertumbuhan output industri skel kecil dan sederhana (IKS) di Malaysia.
Analisis, 9 (1&2).
In Malaysia, small and medium-scale industries (SMls) comprise about 90 per cent of the total manufacturing establishments. However contribution of SMIs to the manufacturing value added is quite low at about 26 per cent. This is partly attributed to low level of productivity and effciency and less capability of SMIs to gain economies of scale. In this respect, SMIs cannot merely rely on physical inputs like capital and labour in the course to raise their value added but must enhance the contribution of total factor productivity (TFP). TFP refers
to a gain in additional output as a result of enhncement in firms' eficiency.An increase in the contribution of TFP will lead a decrease in cost of production and hence, firm will be more competitive. This article attempts to analyse to what extent TFP growth contributes to SMIs' output growth. Analysis in this article separates SMls by size, namely, small-scale industry (SSIs) and medium-
scale industries (MSIs).In each industrial size, the analysis will compare TFP contribution by sub-industries. Analysis is based on the six selected sub-industries,
namely, food, beverage, wood-based, chemical, rubber-based and non-metallic mineral products. The data for the analysis is obtained from the Manufacturing Industrial Survey, Department of Statistics, Malaysia for the
period of 1981-1994. Analysis is based on the estimation results of the production function using stochastic frontier approach, whereby TFP is divided into two parts, namely, technical eficiency and technological progress.
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