Lee, Yong Chin and Thean, Lim Ghee and Lean, Hooi Hooi (2025) What Predicts the Technical Efficiency in Malaysia’s Food Processing Industry? Journal of Economics and Sustainability (JES), 7 (1). pp. 36-53. ISSN 2637-1294
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Abstract
The present study adopts data envelopment analysis (DEA) and Tobit regression to focus on the technical efficiency of small and medium enterprises (SMEs) and large-scale enterprises (LSEs) in Malaysia’s food processing industry. The empirical results provide that the SMEs’ technical efficiency score in constant return to scale (CRS) and variable return to scale (VRS) are 0.940 and 0.986, respectively, which indicates that SMEs can enhance the output level by 6 per cent for CRS and 1.4 per cent for VRS using a given level of inputs. Moreover, the technical efficiency levels of LSEs are 0.673 and 0.942 from CRS and VRS, respectively. The findings also suggest that training cost, research and development, and foreign direct investment positively affect technical efficiency. In contrast, information and technology, public infrastructure, and trade openness negatively affect the technical efficiency of SMEs. On the other hand, government infrastructure and trade openness positively connect with the technical efficiency of LSEs in Malaysia’s food processing industry. Contradiction, research and development, and world oil prices negatively affect the technical efficiency in LSEs, indicating that the higher these variables, the higher the efficiency in LSEs
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Technical efficiency, food processing industry (FPI), data envelopment analysis (DEA), small and medium enterprises (SMEs), large scale enterprises (LSEs) |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor |
| Divisions: | School of Government |
| Depositing User: | Mdm. Rozana Zakaria |
| Date Deposited: | 15 Dec 2025 16:09 |
| Last Modified: | 15 Dec 2025 16:09 |
| URI: | https://repo.uum.edu.my/id/eprint/32639 |
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