Vertical specialisation and backward linkages: Reconsidering malaysian manufacturing development

Wai Heng Loke, Siew Yean Tham

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Malaysia has undergone substantial transformation, shifting from primary commodity to manufacturing production in about five decades since independence. The government is currently concerned with shifting from a middle to high income economy. The Tenth Malaysia Plan (2011-2015) has identified 12 key drivers of economic activities that will serve to propel the country toward a high income economy. Of these 12 activities, only palm oil and related products, electrical and electronics (e&e) and information and technology (IT) sub-sectors are related to manufacturing, while others are services. The objective of this paper is to identify manufacturing sectors that can be further developed to facilitate economic growth. Using Hummel's vertical specialisation index and Rasmussen's backward linkage index, we divide the manufacturing sector into four main groups, using the 2005 Input-Output table of Malaysia. Identifying these groups of industries will enable the government to focus not just on the palm oil and related products, e&e and IT sub-sectors alone, but to diversify to other subsectors that have a great potential to facilitate the shift to a highincome economy.

Original languageEnglish
Pages (from-to)57-76
Number of pages20
JournalMalaysian Journal of Economic Studies
Volume51
Issue numberSPEC. ISSUE
Publication statusPublished - 2014

Fingerprint

Vertical specialization
Backward linkages
Manufacturing
Malaysia
Palm oil
Income
Government
Manufacturing sector
Input-output table
Primary commodities
Industry
Economic growth
Economic activity

Keywords

  • Backward linkages
  • Malaysia
  • Manufacturing
  • Vertical specialisation

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

Vertical specialisation and backward linkages : Reconsidering malaysian manufacturing development. / Loke, Wai Heng; Tham, Siew Yean.

In: Malaysian Journal of Economic Studies, Vol. 51, No. SPEC. ISSUE, 2014, p. 57-76.

Research output: Contribution to journalArticle

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