Identifying the Key Determinants of Firm Productivity in the Manufacturing and Services Sectors in Malaysia

Abstract

This study investigates the key determinants of firm productivity within the manufacturing and services sectors in Malaysia, focusing on factors such as innovation, training, organizational structure, skilled labour, technology, and firm size. Utilising data from the 2015 Enterprise Survey by the World Bank, the study employs multiple regression and dominance analysis to identify the most influential variables. The results indicate that firm size, particularly large firms, plays a dominant role in enhancing productivity, followed by the geographical location of firms in East and East Coast Malaysia. Additionally, innovation, skilled workers, and a well-organized structure positively impact productivity, while training and technology adoption show a moderate influence. This research provides valuable insights for policymakers and business leaders seeking to improve productivity in Malaysian firms, contributing to the nation’s competitiveness in the global market.