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

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 explic...

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Bibliographic Details
Published in:Malaysian journal of economic studies 2022-06, Vol.59 (1), p.153-170
Main Authors: Yunus, Norhanishah Mohamad, Abdullah, Norehan
Format: Article
Language:English
Subjects:
Absorptive capacity
Education
Employees
Foreign investment
Human capital
Knowledge
Manufacturing
Multinational corporations
Productivity
Proxies
Regression analysis
Skills
Technology transfer
Workers
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Summary: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.
ISSN:1511-4554
DOI:10.22452/MJES.vol59noL8