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Title:	Vertical and horizontal FDI technology spillovers from Malaysian E&E and food industries in Malaysia
Authors:	Salmah binti Mohd Salleh (P35555)
Supervisor:	Noor Aini Khalifah, Assoc. Prof. Dr.
Keywords:	Spillovers Food industries Research Industrial -- Malaysia
Issue Date:	10-Aug-2013
Description:	This study examines two aspects related to the issue of indirect technology transfer through spillovers from FDI to enhance Malaysia��s development. Combining both input-output data for 2000 and a balanced panel data set for the period 2000-2004, this study estimates total factor productivity (TFP) of establishments as a function of the different extent of foreign presence within and across industries; amongst other explanatory variables. TFP is estimated using the semi-parametric approach developed by Levinsohn and Petrin which corrects for endogeneity. This study examines, firstly, spillovers from FDI are distinguished both horizontally and vertically for large versus small and medium enterprises (SMEs), by type of industry (electrical and electronics (E&E) versus food) and level of technological gap. Generally, the domestic large and SMEs in the E&E industry are entirely different with the former showing significant negative backward spillover and the latter being associated with negative forward spillover when foreignness is measured in terms of capital. In contrast, domestic large and SMEs in the food industry benefit from foreign presence in the upstream supplier industries and horizontal spillover when foreignness is measured in terms of capital. However, the technology gap does matter in the food industry with positively significant backward and horizontal spillover effects for domestic frontier SMEs and positively significant forward spillover effects for domestic laggard SMEs when foreignness is measured in terms of wages. The domestic laggard SMEs in the E&E industry benefit from vertical and horizontal spillovers when foreignness is measured in terms of capital. Secondly, this study estimates TFP of establishments in the domestic (less than 10 per cent foreign equity ownership) and foreign-owned (greater than or equal to 10 per cent foreign equity ownership) establishments as a function of the different extent of foreign presence and inter-industry linkages; amongst other explanatory variables. All measures of backward linkages from FDI presence are related positively to TFP of domestic establishments and negatively associated with TFP of foreign-owned establishments in the E&E industry. However, the horizontal and backward spillovers are related positively to TFP of domestic establishments but insignificant for foreign-owned establishments in the food industry when foreignness is weighted by capital. The mixed results from this study of spillover effects from FDI on TFP of domestic establishments in the E&E and food industries and technological gap as well as the different proxies used to measure the degree of foreignness in an industry, suggest that heterogeneity in establishments�� characteristics should be accounted for in the studies of spillover effects. An important implication from this study is that indirect technology transfer is industry-specific and that government policy with respect to FDI needs to be tailored to individual industries taking into account size and absorptive capacity of the establishment in the domestic economy.,Ph.D
Pages:	166
Call Number:	HG4538.S239 2013
Publisher:	UKM, Bangi
Appears in Collections:	Faculty of Economy and Management / Fakulti Ekonomi dan Pengurusan

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