Innovation and technical efficiency in Malaysian family manufacturing industries

Authors

  • Susila Munisamy Associate Professor, Faculty of Economic, University of Malaya.
  • Chia Zi Fon Ph.D candidate, Faculty of Economic, University of Malaya
  • Edward Sek Wong University of Malaya Lembah Pantai Kuala Lumpur Malaysia

DOI:

https://doi.org/10.18533/jefs.v3i03.109

Keywords:

Data Envelopment Analysis, technical efficiency, innovation and balanced scorecard.

Abstract

This study investigates the technical efficiency for each industry in the Malaysian manufacturing sector is estimated by using Data Envelopment Analysis (DEA). In order to pursue a balance of innovation between long-term and short-term performance strategy, we integrate the Balance Scorecard (BSC) approach with DEA. Furthermore, this paper looks at the determinants of efficiency using the Tobit regression model. In measuring the level of firms’ efficiency and innovation, the wood and wood based products industry is emphasized due to its importance in the economic growth of manufacturing sector. In the wood and wood based products industry, the highest level of technical efficiency was achieved by two sub-sectors i.e. veneer sheets and plywood and laminboard, particle board and other panels board, with the mean value of technical efficiency of 1.081 and 1.097 respectively. Generally, the majority of the manufacturing firms are operating technical inefficiently. The distribution of DEA and DEA-BCS technical efficiency in Malaysian Manufacturing Industries show that most of the industries have the average technical efficiency scores greater than 1.05 with only 7 industries (13.21%) in DEA-BSC model operating at or near to the most optimal productions. 

Author Biography

  • Edward Sek Wong, University of Malaya Lembah Pantai Kuala Lumpur Malaysia

    Assoc Prof Dr. Edward Sek Khin Wong, (corresponding author)

    Faculty of Business & Accountancy

    University of Malaya, Kuala Lumpur 

    Malaysia

    Tel.: +603 79673844

    Fax: +603  79673980

    E-mail: edwardwong@um.edu.my

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Published

2015-08-25

Issue

Vol. 3 No. 04 (2015): August

Section

Articles

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