Drivers of export competitiveness: new evidences from the manufacturing industry in Malaysia

Abstract

With cognizance to firms’ heterogeneity in an industry, this paper employs the most recent, unpublished and large-scale firm-level data of 14,687 manufacturing firms in Malaysia in 2015 to revisit the drivers of manufacturing exports. Applying the OLS and logistic regressions, we observed a strong positive relationship between a firm’s labor productivity and export intensity. Firms’ foreign ownership, size and age are positively connected to their export competitiveness. The incorporation of location variables into the regression reveals that firms in the Southern peninsula of Malaysia (e.g., Johor) have a positive effect and demonstrate the highest probability to engage in export activities. Our study is informative to trade policymakers on the key drivers of manufacturing exports, providing references to not only Malaysia, but other economies in Eastern Asia and developing nations.

Keywords:

• Export
• productivity
• manufacturing
• foreign ownership
• Malaysia

JEL CODE:

• D22
• F23
• L60
• O14

Acknowledgement

The authors would like to extend their deep appreciation to Prof. Dato’ Rajah Rasiah, Dato Prof. Majid Khan, Ms. Maizatul Akma Mat Eil @Ismail and the colleagues from Department of Statistics Malaysia for their generous support to acquire the data used in this paper. The authors also appreciate the feedback of the anonymous reviewer for his/her constructive comments and suggestions. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The research is supported by the China MOE Grant for Area Studies (Grant No. 19GBQY068), Fundamental Research Funds for the Central Universities China (Grant No. 20720191034) and the China MOE Project of Key Research Institute of Humanities and Social Sciences.

Notes on contributors

Miao Zhang

Dr. Zhang Miao is Associate Professor of School of International Relations /Research School for Southeast Asian Studies at Xiamen University, China. She obtained her PhD. in Economics from University of Malaya in 2014. She’s been working on the topics of China's investment in Southeast Asia. Her research interest also includes industrial policy and technology innovation. Dr. Zhang’s previous writings have appeared in a number of international journals such as The Pacific Review, Journal of Contemporary Asia, Habitat International, Cities, The Singapore Economic Review, Asia Pacific Business Review and Journal of the Asia Pacific Economy.

Md Aslam Mia

Dr. Md Aslam Mia is currently working as a Senior Lecturer at the School of Management, Universiti Sains Malaysia (USM). He does research on productivity, market structure, poverty, and development economics with special focus on microfinance. Dr. Mia has actively researched and published numerous articles in WoS and Scopus indexed journals related to productivity and efficiency of microfinance institutions, market structure, international trade and urban economics. Among some of the journals he has published are, The European Journal of Development Research, Business History, Journal of the Asia Pacific Economy, Journal of Cleaner Production, Social Indicators Research, International Journal of Social Economics, Cities, Singapore Economic Review, Economic Analysis and Policy, Strategic Change, Journal of Financial Regulation and Compliance, Journal of Public Affairs, Journal of Economics and Administrative Sciences and other internationally reputed journals. He also actively serves as a reviewer for ISI and Scopus indexed journals.