A Quantile Regression Analysis of Absorptive Capacity in the Malaysian Manufacturing Industry

Norhanishah Mohamad Yunus () and Norehan Abdullah ()
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Norhanishah Mohamad Yunus: School of Distance Education, Universiti Sains Malaysia
Norehan Abdullah: School of Economics, Finance and Banking, Universiti Utara Malaysia

Malaysian Journal of Economic Studies, 2022, vol. 59, issue 1, 153-170

Abstract: Using a set of absorptive capacity proxies, we present new empirical findings on the role of absorptive capacity in assimilating the technology effects from the presence of multinational corporations (MNCs) in the Malaysian manufacturing industry. We applied a quantile regression estimator to explicitly gauge the level of absorptive capacity among workers by their levels of education at different quantiles of the conditional FDI distribution during the period of 2000–2018. We conclude that the medium-high technology industries benefit more from FDI if the workers’ absorptive capacity level reaches at least the median quantile. Based on the findings of this study, we suggest that educational digitisation efforts in enhancing quality human capital should be intensified, by equipping them with the latest knowledge and skills, which in turn requires cooperation between universities, public technical and vocational education and training (TVET) institutions as well as MNCs.

Keywords: Technology effects; foreign direct investment; human capital; absorptive capacity; quantile regression (search for similar items in EconPapers)
JEL-codes: C21 F20 F35 F61 J24 L6 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mjr:journl:v:59:y:2022:i:1:p:153-170

DOI: 10.22452/MJES.vol59no1.8

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