The impacts of technology and human capital on Malaysia's multifactor productivity

Noorazeela Zainol Abidin and Ng Wei Jian

International Journal of Education Economics and Development, 2025, vol. 16, issue 4, 512-526

Abstract: Despite rising tertiary education in Malaysia, MFP growth remains unaffected, and the increasing number of skilled workers has not significantly influenced MFP. As Malaysia moves toward Industrial Revolution 4.0, low R%D expenditure continues to hinder productivity. This study aims to analyse the impacts of technology and human capital on MFP from 1990 to 2021 using the ARDL method. The findings reveal that R%D positively affects MFP in both the short and long run. High-skilled labour has a positive impact in the long run but a negative one in the short run. Education positively influences MFP in the short run but negatively in the long run. Policymakers should prioritise enhancing the education system by introducing more initiatives and support. Additionally, the government should provide subsidies for employers to promote skill-enhancing training programs and increase R%D spending to foster innovation. These measures will drive productivity growth and technological advancement in Malaysia.

Keywords: human capital; technology; multifactor productivity; MFP; skill labour; Malaysia. (search for similar items in EconPapers)
Date: 2025
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