Innovation and Productivity in the Malaysian Food Processing Industry: An Empirical Analysis using a System Generalised Method of Moments Approach

Sarah Nursyazmin Mohamad Kamal (), Normaz Wana Ismail and Shaufique Fahmi Ahmad Sidique ()

Asian Journal of Empirical Research, 2022, vol. 12, issue 2, 54-61

Abstract: The food processing industry was reviewed as a top priority for industrial development and targeted to lead greater growth in Malaysia’s Industrial Masterplan (NIMP). Leading to industrial development, this paper highlighted the relationship between innovative activities (R&D expenditure and ICT expenditure) and productivity with other variables like the presence of skill intensity, capital intensity, export intensity, foreign-owned firms and imported intermediate input. This hypothesis is examined for a panel dataset of the food processing industry in Malaysia from 2000 until 2015 (according to Economic Census- Manufacturing). Using a System Generalised Method of Moments (GMM) approach, empirical analysis suggests that innovators performed better than non-innovators in terms of labour productivity. Innovative activity and ICT expenditure along with skilled intensity and capital intensity seem to be the main determinants of subsector’s productivity, whereas R&D expenditure has mixed results from the estimation output.

Keywords: Food industry; Innovation; Manufacturing; Panel data; SYS-GMM. (search for similar items in EconPapers)
Date: 2022
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