Title of article :
MEASURING INEFFICIENCY IN THE RUBBER MANUFACTURING INDUSTRY
Author/Authors :
fahmy-abdullah, mohd universiti tun hussein onn malaysia - faculty of technology management and business, Batu Pahat, Malaysia , sieng, lai wei universiti kebangsaan malaysia - faculty of economic and management, Bangi, Malaysia , sulaiman, noorasiah universiti kebangsaan malaysia - faculty of economic and management, Bangi, Malaysia , abd rahim, mohd hilmi izwan universiti tunku abd rahman - lee kong chian faculty of engineering and science - department of surverying, Cheras, Malaysia
From page :
79
To page :
96
Abstract :
Malaysia is the fifth largest producer of natural rubber in the world after Thailand, Indonesia, Vietnam and China as well as producing rubber products exported to more than 190 countries worldwide. However, the slowdown in growth of major importers such as China, the European Union and the United States and the perception of stock surplus as output exceeds demand led to fluctuating rubber production performance over the period 2010 to 2016. Hence, this article aims at examining the level of technical efficiency (TE) and to analyze the determinants of the inefficiencies of the rubber manufacturing industry. The analysis was conducted using the latest 145 firms’ data obtained from the Department of Statistics Malaysia (DOS) and using the Stochastic Frontier Analysis (SFA) method. The results showed that the overall TE level was high while the determinants such as the capital-labor ratio, wage rate and firm size had a negative and significant impact that could reduce industrial technical efficiencies. The policy implication is that the rubber manufacturing industry needs to focus on high technological production investment, increase employee motivation through wage increment and create more strategic cooperation with international industry.
Keywords :
Technical efficiency , Technical inefficiency , Rubber industry , Firms , Stochastic Frontier Analysis
Journal title :
International Journal of Economics,Management and Accounting
Journal title :
International Journal of Economics,Management and Accounting
Record number :
2661133
Link To Document :
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