Abstract:
Malaysian manufacturing has an asymmetrical structure: small and medium-sized enterprises
dominate in numbers, but contribute relatively little to total output, employment, and exports
as compared to their larger counterparts. In light of an increasingly competitive environment
arising from globalization, a sound knowledge of turnover patterns within the sector by plant
size and its potential impact on aggregate productivity growth is imperative. We find that
turnover, particularly of large plants, makes a substantial contribution to overall productivity
growth in manufacturing. Hence, from a policy perspective, facilitating turnover might be as
important as supporting existing plants in promoting aggregate productivity growth.
