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Trade, productivity, and innovation: Firm-level evidence from Malaysian manufacturing

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  • Lee, Cassey
Abstract
This study attempts to explore the relationships between trade, productivity and innovation using firm-level data from three innovation surveys covering the period 1997-2004. It is found that the link between exporting and productivity is a weak one in Malaysia. Productivity is driven mainly by capital intensity and human capital but this may not necessarily translate into export dynamism. Innovation, whether it is product or process innovation, is likely to be the key driver in exporting. Exporters are likely to be larger firms with foreign ownership. There is some evidence that trade liberalization may promote exports especially for non-innovating firms. The main policy implication of the findings from this study is that policy makers should focus on enhancing innovation capabilities to ensure export dynamism. There is a need to also consider policies to enhance productivity improvements in sectors with export potential. Policy makers should additionally examine the possibility of lowering tariff levels in industries with relatively lower incidence of innovating but with high export potential. More attention should also be paid to providing a conducive environment for small domestic firms to innovate and venture into exporting.

Suggested Citation

  • Lee, Cassey, 2011. "Trade, productivity, and innovation: Firm-level evidence from Malaysian manufacturing," Journal of Asian Economics, Elsevier, vol. 22(4), pages 284-294, August.
    • Handle: RePEc:eee:asieco:v:22:y:2011:i:4:p:284-294
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    References listed on IDEAS

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    Cited by:

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    2. Feng, Kuo & Guo, Yue & Ji, Yujun & Wang, Yuping, 2023. "Impact of the Internet on the exports in ocean-based manufacturing: Firm-level evidence from China," Journal of Asian Economics, Elsevier, vol. 84(C).
    3. Alejandro García-Pozo & Juan Antonio Campos-Soria & J. Aníbal Núñez-Carrasco, 2021. "Technological innovation and productivity across Spanish regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(1), pages 167-187, August.
    4. Esther Goya & Esther Vayá & Jordi Suriñach, 2011. "Productivity and innovation spillovers: Micro evidence from Spain," IREA Working Papers 201126, University of Barcelona, Research Institute of Applied Economics, revised Dec 2011.
    5. Muhammad Asghar & Imran Sharif Chaudhry & Sharafat Ali, 2024. "Innovation, Energy Consumption and Trade Dynamic: Evidence from Developed and Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4356-4382, March.
    6. Esther Goya & Esther Vayá & Jordi Suriñach, 2012. "“Do intra- and inter-industry spillovers matter? CDM model estimates for Spain”," AQR Working Papers 201207, University of Barcelona, Regional Quantitative Analysis Group, revised Sep 2012.
    7. Waheed, Abdul, 2011. "Innovation and firm-level productivity: econometric evidence from Bangladesh and Pakistan," MERIT Working Papers 2011-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Abdul Waheed, 2017. "Innovation and Firm-Level Productivity: Evidence from Bangladesh," The Developing Economies, Institute of Developing Economies, vol. 55(4), pages 290-314, December.

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