The impacts of foreign labour entry on the labour productivity in the Malaysian manufacturing sector

Nur Sabrina Mohd Palel, Rahmah Ismail, Abd. Hair Awang

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Improvement and strengthening of labour productivity is an important approach to accelerate the growth of the manufacturing sector in Malaysia. This study attempts to analyses the impacts of the entry of foreign workers on the labour productivity of the manufacturing sector in Malaysia. The analysis of this study employs the dynamic panel data method which combines time series and cross-section data. The data used was from the year 1990 to 2008, covering 15 selected sub-sectors in the Malaysia manufacturing sector. Core to the analysis in the study is the Pooled Mean Group (PMG) estimation model. The study found that foreign labour, local labour, capital intensity and foreign direct investment (FDI) have positive and significant effects on the labour productivity growth. The study differentiates between local and foreign labour into categories of skilled and unskilled labour. The findings indicated that unskilled foreign and local labour are negatively and significantly affect the growth of labour productivity in the long run. Inversely, skilled local and foreign labour had a significant and positive impact on the labour productivity growth. However, the contribution of foreign labour on labour productivity is smaller compared to the local labour.

Original languageEnglish
Pages (from-to)29-56
Number of pages28
JournalJournal of Economic Cooperation and Development
Volume37
Issue number3
Publication statusPublished - 2016

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labor productivity
manufacturing sector
labor
Malaysia
capital intensity
foreign worker
Manufacturing sector
Labor
Labour productivity
direct investment
foreign investment
time series

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Political Science and International Relations

Cite this

The impacts of foreign labour entry on the labour productivity in the Malaysian manufacturing sector. / Palel, Nur Sabrina Mohd; Ismail, Rahmah; Awang, Abd. Hair.

In: Journal of Economic Cooperation and Development, Vol. 37, No. 3, 2016, p. 29-56.

Research output: Contribution to journalArticle

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