2012 Fiscal Year Final Research Report
A Study on Production Cost in the Malaysian Manufacturing Sector
| Project/Area Number |
22530297
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic policy
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| Research Institution | Institute of Developing Economies, Japan External Trade Organization |
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Principal Investigator |
KODAMA Masahiro 日本貿易振興機構アジア経済研究所, 開発研究センター, 研究員 (20450512)
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| Project Period (FY) |
2010 – 2012
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| Keywords | 経済発展 |
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| Research Abstract |
One of the most important economic issues that Malaysia now faces is the problem of how to sustain economic growth. In particular, high labor wages are considered to be a major negative factor for economic growth sustainability. The Malaysian economy grew quickly by taking advantage of low-wage labor. Given the current state of high wages in comparison with less developed countries in Asia, the sustainability of growth is a major concern; FDI companies have moved out of Malaysia to avoid high production costs. From the viewpoint of productivity and production costs, I analyze whether Malaysia is competitive in comparison with less developed countries in Asia.
The econometric analysis suggests that the advantage of electronic and electrical companies in Malaysia is, in the viewpoint of labor, decreasing, when comparing those in 2001 and 2009. This result implies leading industry's competitiveness of Malaysia is becoming weak. Furthermore, the empirical analysis cannot reject the possibility that Malaysia is caught in the so-called Middle Income Trap.
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