Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000

Food manufacturing industry has been the backbone of Malaysia’s economic stability and growth for decades. The food-manufacturing sector experiences a rather volatile trend during 1993-2000. Due to emphasis given by the government, the manufacturing sector grew by 9.17 percent per annum in 1993 as c...

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Main Author:	Radam, Alias
Format:	Thesis
Language:	English English
Published:	2007
Subjects:	Food industry and trade - Malaysia - Case studies
Online Access:	http://psasir.upm.edu.my/id/eprint/5508/1/FP_2007_29.pdf
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id	my-upm-ir.5508
record_format	uketd_dc
spelling	my-upm-ir.55082013-05-27T07:23:20Z Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000 2007 Radam, Alias Food manufacturing industry has been the backbone of Malaysia’s economic stability and growth for decades. The food-manufacturing sector experiences a rather volatile trend during 1993-2000. Due to emphasis given by the government, the manufacturing sector grew by 9.17 percent per annum in 1993 as compared to the previous year, where the sector contributed 45.8 percent to overall increase in GDP. The rate of annual change increment declined from 7.8 percent in 1994 to 6.0 percent in 1995, and this trend continued till 2000. The annual increment dropped by –2.5 percent in 1998, mainly due to the lack of financial support and capital constraints as Malaysia experienced financial crisis during this period. Evidence such as the value of output, exports, employment generations and value added revealed significant disparity. This disparity begs the question as to the sustainability the food manufacturing sector under the rapid growth of other sectors. The relevant indicators have include’s efficiency and productivity of the sector which provide as the benchmark for performance analysis. This study aims to examine the performance of the Malaysian Food Manufacturing Industries in terms of productivity and efficiency during the period 1983 – 2000. The non-parametric Data Envelopment Analysis (DEA), approach are utilized to compute the Malmquist Total Factor Productivity (TFP) indices. The empirical results indicate that only 26.7 percent of the Malaysian food manufacturing industries are closed to the frontier. The average of the technical efficiency of food manufacturing industry increased from 86.5 percent in 1983 to 92.1 percent in 2000. This increase could be due to a gradual narrowing of the gap between the “normal” and “best” practice industries. The average of the scale efficiency of food manufacturing industry increased from 91.8 percent in 1983 to 94.1 percent in 2000 while the average of the pure efficiency of food manufacturing industry increased from 93.9 percent in 1983 to 94.1 percent in the same period. The findings also indicate that between 1983-2000 the annual rate of TFP growth varied. TFP increased by 2.1 percent in 1985, 0.2 percent (1989), 4.2 percent (1990), 4.0 percent (1992), 1.2 percent (1993), 0.1 percent (1997) and 1.7 percent(1998). Overall TFP annual growth rate decreased an average rate of 0.02 percent per annum over the entire 1984-2000 period. Results show that the efficiency change and technical change seem to move in opposite direction. The average technical change (TECHCH) declined over the period under study (-0.6 percent per year) and its contribution to TFP growth is largely due to the increase in the efficiency change (0.4 percent per year). The food manufacturing industries has a strategic role for Malaysia in the context of globalization. The increasing importance of processed food exports when compare with primary commodities confirms this sector as a key component of export growth strategies. At the same time, it was noted that these opportunities are currently heavily concentrated on a limited number of traditional product categories. The empirical estimates of the Malaysian food manufacturing efficiency and productivity performance point to the fact that a greater investment in R&D is needed. To maintain high efficiency, a stable and well-informed environment is called for. Food industry and trade - Malaysia - Case studies 2007 Thesis http://psasir.upm.edu.my/id/eprint/5508/ http://psasir.upm.edu.my/id/eprint/5508/1/FP_2007_29.pdf application/pdf en public phd doctoral Universiti Putra Malaysia Food industry and trade - Malaysia - Case studies Faculty Agriculture English
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English English
topic	Food industry and trade - Malaysia - Case studies
spellingShingle	Food industry and trade - Malaysia - Case studies Radam, Alias Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000
description	Food manufacturing industry has been the backbone of Malaysia’s economic stability and growth for decades. The food-manufacturing sector experiences a rather volatile trend during 1993-2000. Due to emphasis given by the government, the manufacturing sector grew by 9.17 percent per annum in 1993 as compared to the previous year, where the sector contributed 45.8 percent to overall increase in GDP. The rate of annual change increment declined from 7.8 percent in 1994 to 6.0 percent in 1995, and this trend continued till 2000. The annual increment dropped by –2.5 percent in 1998, mainly due to the lack of financial support and capital constraints as Malaysia experienced financial crisis during this period. Evidence such as the value of output, exports, employment generations and value added revealed significant disparity. This disparity begs the question as to the sustainability the food manufacturing sector under the rapid growth of other sectors. The relevant indicators have include’s efficiency and productivity of the sector which provide as the benchmark for performance analysis. This study aims to examine the performance of the Malaysian Food Manufacturing Industries in terms of productivity and efficiency during the period 1983 – 2000. The non-parametric Data Envelopment Analysis (DEA), approach are utilized to compute the Malmquist Total Factor Productivity (TFP) indices. The empirical results indicate that only 26.7 percent of the Malaysian food manufacturing industries are closed to the frontier. The average of the technical efficiency of food manufacturing industry increased from 86.5 percent in 1983 to 92.1 percent in 2000. This increase could be due to a gradual narrowing of the gap between the “normal” and “best” practice industries. The average of the scale efficiency of food manufacturing industry increased from 91.8 percent in 1983 to 94.1 percent in 2000 while the average of the pure efficiency of food manufacturing industry increased from 93.9 percent in 1983 to 94.1 percent in the same period. The findings also indicate that between 1983-2000 the annual rate of TFP growth varied. TFP increased by 2.1 percent in 1985, 0.2 percent (1989), 4.2 percent (1990), 4.0 percent (1992), 1.2 percent (1993), 0.1 percent (1997) and 1.7 percent(1998). Overall TFP annual growth rate decreased an average rate of 0.02 percent per annum over the entire 1984-2000 period. Results show that the efficiency change and technical change seem to move in opposite direction. The average technical change (TECHCH) declined over the period under study (-0.6 percent per year) and its contribution to TFP growth is largely due to the increase in the efficiency change (0.4 percent per year). The food manufacturing industries has a strategic role for Malaysia in the context of globalization. The increasing importance of processed food exports when compare with primary commodities confirms this sector as a key component of export growth strategies. At the same time, it was noted that these opportunities are currently heavily concentrated on a limited number of traditional product categories. The empirical estimates of the Malaysian food manufacturing efficiency and productivity performance point to the fact that a greater investment in R&D is needed. To maintain high efficiency, a stable and well-informed environment is called for.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Radam, Alias
author_facet	Radam, Alias
author_sort	Radam, Alias
title	Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000
title_short	Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000
title_full	Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000
title_fullStr	Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000
title_full_unstemmed	Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000
title_sort	efficiency and productivity of the malaysian food manufacturing industry, 1983-2000
granting_institution	Universiti Putra Malaysia
granting_department	Faculty Agriculture
publishDate	2007
url	http://psasir.upm.edu.my/id/eprint/5508/1/FP_2007_29.pdf
_version_	1747810440115650560

Efficiency And Productivity Of The Malaysian Food Manufacturing Industry, 1983-2000

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