THE ROLE OF FDI INTENSITY IN ACHIEVING PRODUCTIVITY DRIVEN GROWTH IN MALAYSIAN ECONOMY

Elsadig Ahmed

Applied Econometrics and International Development, 2010, vol. 10, issue 1

Abstract: This study investigates the decomposition of labour productivity growth into contributions of capital deepening, increased usage of Foreign Direct Investment intensity (FDI intensity), and the simultaneous contribution of the quality of these factors. This is expressed as the Total Factor Productivity (TFP) per unit of labour growth in achieving productivity-driven growth in the Malaysian economy. The results of this modified extensive growth theory model show that the productivity growth of Malaysia’s economy is input-driven and being based on FDI when the results of TFP per unit of labour growth were compared. The study also finds that there is a negative contribution of the TFP per unit of labour growth during the sub-period of 1987-1996, although the contribution of the labour productivity was one of the highest during this sub-period.

Keywords: FDI intensity; input-driven; TFP per unit of labour; Malaysia’s economy (search for similar items in EconPapers)
JEL-codes: C22 E23 (search for similar items in EconPapers)
Date: 2010
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