IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v27y2010i1p395-403.html
   My bibliography  Save this article

The influence of Flexible Manufacturing Technology adoption on productivity of Malaysian manufacturing industry

Author

Listed:
  • Dolage, D.A.R.
  • Sade, Abu Bakar
  • Ahmed, Elsadig Musa

Abstract

This paper investigates the influence of the adoption of Flexible Manufacturing Technology (FMT) on the Total factor Productivity Growth (TFPG) of Malaysia Manufacturing Industry. The Principal Component Analysis has been adopted to extract the most appropriate underlying dimensions of FMT to use in place of the eight FMT variables owing to the potential multicollinearity. The study has been conducted within FMT intensively adopted 16 three-digit industries that encompass 50 five-digit industries covering the years 2000-2005. The results obtained from the two situations, one, including the industry fixed effects dummy variables and the other without these, are contrasted. It is established that the model that included the industry fixed effect dummy variables has a greater explanatory power. The two principal components that account for the greater variation in FMT show positive and moderately significant relationship with TFPG. The study provides sufficient evidence to conclude that FMT has a direct and moderately significant relationship with TFPG.

Suggested Citation

  • Dolage, D.A.R. & Sade, Abu Bakar & Ahmed, Elsadig Musa, 2010. "The influence of Flexible Manufacturing Technology adoption on productivity of Malaysian manufacturing industry," Economic Modelling, Elsevier, vol. 27(1), pages 395-403, January.
    • Handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:395-403
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264-9993(09)00179-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. H. M. Leung, 1997. "Total factor productivity growth in Singapore's manufacturing industries," Applied Economics Letters, Taylor & Francis Journals, vol. 4(8), pages 525-528.
    2. Kishor Sharma & Sisira Jayasuriya & Edward Oczkowski, 2000. "Liberalization and Productivity Growth: The Case of Manufacturing Industry in Nepal," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 205-222.
    3. Renuka Mahadevan, 2002. "A frontier approach to measuring total factor productivity growth in Singapore’s services sector," Journal of Economic Studies, Emerald Group Publishing, vol. 29(1), pages 48-58, January.
    4. Robert Mcguckin & Mary Streitwieser & Mark Doms, 1998. "The Effect Of Technology Use On Productivity Growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(1), pages 1-26.
    5. Berndt, Ernst R. & Morrison, Catherine J., 1995. "High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis," Journal of Econometrics, Elsevier, vol. 65(1), pages 9-43, January.
    6. Mao Zhi & Goh Bee Hua & Shou Qing Wang & George Ofori, 2003. "Total factor productivity growth accounting in the construction industry of Singapore," Construction Management and Economics, Taylor & Francis Journals, vol. 21(7), pages 707-718.
    7. Lars-Hendrik Röller & Mihkel M. Tombak, 1993. "Competition and Investment in Flexible Technologies," Management Science, INFORMS, vol. 39(1), pages 107-114, January.
    8. Louis Amato & Christie Amato, 2000. "The Impact of High Tech Production Techniques on Productivity and Profitability in Selected U.S. Manufacturing Industries," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(4), pages 327-342, June.
    9. Menon, Jayant, 1998. "Total factor productivity growth in foreign and domestic firms in Malaysian manufacturing," Journal of Asian Economics, Elsevier, vol. 9(2), pages 251-280.
    10. Rao, P S & Preston, R S, 1984. "Inter-factor Substitution, Economies of Scale and Technical Change: Evidence from Canadian Industries," Empirical Economics, Springer, vol. 9(2), pages 87-111.
    11. Charles H. Fine & Robert M. Freund, 1990. "Optimal Investment in Product-Flexible Manufacturing Capacity," Management Science, INFORMS, vol. 36(4), pages 449-466, April.
    12. Harry Bloch & Sam Hak Kan Tang, 1999. "Technical change and total factor productivity growth: a study of Singapore's manufacturing industries," Applied Economics Letters, Taylor & Francis Journals, vol. 6(10), pages 697-701.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jung, Hyun-Joon & Na, Kyoung-Youn & Yoon, Chang-Ho, 2013. "The role of ICT in Korea’s economic growth: Productivity changes across industries since the 1990s," Telecommunications Policy, Elsevier, vol. 37(4), pages 292-310.
    2. Alguacil, Maite & Lo Turco, Alessia & Martínez-Zarzoso, Inmaculada, 2022. "Robot adoption and export performance: Firm-level evidence from Spain," Economic Modelling, Elsevier, vol. 114(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manu Goyal & Serguei Netessine, 2007. "Strategic Technology Choice and Capacity Investment Under Demand Uncertainty," Management Science, INFORMS, vol. 53(2), pages 192-207, February.
    2. Yang, Liu & Ng, C.T., 2014. "Flexible capacity strategy with multiple market periods under demand uncertainty and investment constraint," European Journal of Operational Research, Elsevier, vol. 236(2), pages 511-521.
    3. Oleg Badunenko & Daniel J. Henderson & Subal C. Kumbhakar, 2012. "When, where and how to perform efficiency estimation," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 175(4), pages 863-892, October.
    4. Manu Goyal & Serguei Netessine, 2011. "Volume Flexibility, Product Flexibility, or Both: The Role of Demand Correlation and Product Substitution," Manufacturing & Service Operations Management, INFORMS, vol. 13(2), pages 180-193, March.
    5. Barad, M. & Hoang, K., 1995. "Cutting tools versus machine tools investments in FMS design," International Journal of Production Economics, Elsevier, vol. 42(1), pages 29-40, November.
    6. Liu Yang & Chi To Ng & Yaodong Ni, 2017. "Flexible capacity strategy in an asymmetric oligopoly market with competition and demand uncertainty," Naval Research Logistics (NRL), John Wiley & Sons, vol. 64(2), pages 117-138, March.
    7. Uras, Burak R. & Wang, Ping, 2024. "Misallocation, Productivity and Development with Endogenous Production Techniques," Journal of Development Economics, Elsevier, vol. 167(C).
    8. Tseng, Mei-Chiun, 2004. "Strategic choice of flexible manufacturing technologies," International Journal of Production Economics, Elsevier, vol. 91(3), pages 223-227, October.
    9. Yanmin Jiang & Rui-Na Fan, 2022. "Capacity Investment and Process Efficiency at Flexible Firms," Mathematics, MDPI, vol. 10(10), pages 1-17, May.
    10. Elena Ketteni & Theofanis Mamuneas & Panos Pashardes, 2013. "ICT and Energy Use: Patterns of Substitutability and Complementarity in Production," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 7(1), pages 63-86, June.
    11. Khayyat, Nabaz T. & Lee, Jongsu & Lee, Jeong-Dong, 2014. "How ICT Investment Influences Energy Demand in South Korea and Japan?," MPRA Paper 55454, University Library of Munich, Germany.
    12. Chia-Hung Sun, 2005. "Productivity growth in East Asian manufacturing: a fading miracle or measurement problem?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(1), pages 1-19.
    13. Yang, Liu & Wang, Yonggui & Ma, Jun & Ng, Chi To & Cheng, T.C.E., 2014. "Technology investment under flexible capacity strategy with demand uncertainty," International Journal of Production Economics, Elsevier, vol. 154(C), pages 190-197.
    14. Burak R. Uras & Ping Wang, 2017. "Production Flexibility, Misallocation and Total Factor Productivity," NBER Working Papers 23970, National Bureau of Economic Research, Inc.
    15. Kiley, Michael T., 2001. "Computers and growth with frictions: aggregate and disaggregate evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 171-215, December.
    16. Gangopadhyay, Partha & Jain, Siddharth & Bakry, Walid, 2022. "In search of a rational foundation for the massive IT boom in the Australian banking industry: Can the IT boom really drive relationship banking?," International Review of Financial Analysis, Elsevier, vol. 82(C).
    17. Morrison Paul, Catherine J. & Siegel, Donald, 1997. "Automation Or Openness?: Technology And Trade Impacts On Costs And Labor Composition In The Food System," Strategy and Policy in the Food System: Emerging Issues, June 20-21, 1996, Washington, D.C. 25940, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    18. Raddatz, Claudio, 2006. "Liquidity needs and vulnerability to financial underdevelopment," Journal of Financial Economics, Elsevier, vol. 80(3), pages 677-722, June.
    19. Robert C. Feenstra & Gordon H. Hanson, "undated". "Productivity Measurement And The Impact Of Trade And Technology On Wages: Estimates For The U.S., 1972-1990," Department of Economics 97-17, California Davis - Department of Economics.
    20. Brian Tomlin & Yimin Wang, 2005. "On the Value of Mix Flexibility and Dual Sourcing in Unreliable Newsvendor Networks," Manufacturing & Service Operations Management, INFORMS, vol. 7(1), pages 37-57, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:395-403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.