A Study of Perception of International Students on Quality of Malaysian Cars

Authors

  • Cheng Wei Hin UUM College of Business, Universiti Utara Malaysia, Malaysia
  • Filzah Md Isa UUM College of Business Universiti Utara Malaysia, Malaysia
  • Hoe Chee Hee UUM College of Business Universiti Utara Malaysia, Malaysia

DOI:

https://doi.org/10.32890/mmj2014.18.2

Keywords:

Palm oil refining industry, excess capacity, entry deterrence

Abstract

This paper examines how international students in a local public institution perceived the quality of Malaysian-made cars and whether the country of origin is an important factor in determining the purchase decision of a car. A total of 176 full-time registered international students from 12 countries participated as respondents in this research. A purposive sample was used in this research whereby respondents were asked to complete a self-administrated questionnaire. The findings supported the literature which indicated that most respondents have a more favourable perception of cars made in the developed countries than cars made in developing countries. The influence of country of origin, also known as the “made in†effect, has been broadly defined as the positive or negative influence that a country’s product of manufacture may have on consumers’ decision processes or subsequent behaviour. The result of this research showed that the effect of country of origin is discernable among the respondents.

 

Downloads

Download data is not yet available.

References

Abdul Jalil, S. (1996). Capacity utilisation in the Malaysian palm oil refining industry (Unpublished doctoral dissertation). Bangi: Universiti Putra Malaysia. Allen, B., Deneckere, R., Faith, T., & Kovenock,

D. (2000). Capacity pre-commitment as a barrier to entry: A Bertrand-Edgeworth approach. Economic Theory, 15(3), 501–530.

Bagchi, A., & Mukherjee, A. (2011). Commitment and excess capacity with licensing: An old debate with a new look. Journal of Economics, 103(2), 133–147 Besanko, D., Doraszelski, U., Lu, L.X., &

Satterthwaite, M. (2010). On the role of demand and strategic uncertainty in capacity investment and disinvestment dynamics. International Journal of Organization, 28(4), 383–389.

Brock, W.A., & Scheinkman, J.A. (1985). Price setting supergames with capacity constraints. The Review of Economic Studies, 52(3), 371–382.

Bulow, J., Geanakoplos, J., & Klemperer, P. (1985). Holding idle capacity to deter entry. The Economic Journal, 95(377), 178–182.

Carree, M. A. (2007). On factors promoting and hindering entry and exit. In S. Parker (Ed.), International handbook series on entrepreneurship (Volume 3, pp. 161–183). New York: Springer United States.

Christensen, L. R., & Caves, R. E. (1997). Cheap talk and investment rivalry in the pulp and paper industry. The Journal of Industrial Economics, 45(1), 47–73.

Conrad, K., & Veall, M. R. (1991). A test for strategic excess capacity. Journal of Empirical Economics, 16(4), 433–445. Conclusion The aim of this paper was to comprehensively examine the relationship between excess capacity and probability of entry deterrence in the Malaysian palm oil refining industry. The results of the logit model indicated that all the coefficients showed the correct expected signs.

According to Gujarati (2003), it should be noted that the expected signs of the coefficients are crucially important in analysis of logit. The variable results were however insignificant and it proved that excess capacity does not work to deter entry in the Malaysian palm oil industry. The government’s involvement in the industry is believed to have contributed to the insignificant results for the above analysis. The palm oil industry is a regulated industry in which the government has control over the production, capacity, and licensing of entrance of firms. This intervention overrules the possibility of free entry or exit of firms in the said industry, thus may impede the use and the effectiveness of excess capacity in barricading entry of new firms into the industry as a whole. End Notes

Dixit (1980) believed that in times of entry, incumbent firms would increase production to bring the price down, but would eventually reduce output production, as the drop in prices would affect them also. He thus concluded that excess capacity does not work as a threat since capacity would remain idle post-entry. As of 2011, the palm oil refining industry in Malaysia was represented by 56 operating refineries. With 38 refineries in Peninsular Malaysia and the remaining 18 refineries in Sabah and Sarawak producing a huge amount of oil production for world consumption.

Cowling, K. (1983). Excess capacity and the degree of collusion: Oligopoly behaviour in the slump. The Manchester School of Economic and Social Studies, 51(4), 341–359.

Davis, E. (2002, December 23). What will 2003 bring? BBC News, Business World Edition. Retrieved from http://news.bbc. co.uk

Dickey, D. A., & Fuller, W.A. (1979). Distribution of the estimators for autoregressive time-series with a unit root. Journal of the American Statistical Association, 74(366), 427–431.

Dixit, A. (1980). The role of investment in entry-deterrence. The Economic Journal, 90(357), 95–106.

Driver, C. (2000). Capacity utilization and excess capacity: Theory, evidence and policy. Review of Industrial Organization, 16(1), 69–87.

Esposito, F. F., & Esposito, L. (1974). Excess capacity and market structure. The Review of Economics and Statistics, 56(2), 188–194.

Fussilio, M. (2002). Excess capacity and entry deterrence: The case of ocean liner shipping markets. Paper presented at International Association of Maritime Economists (IAME) Conference 2002, Panama 13-15 November (pp. 20–41).

Gabszewicz, J. J., & Poddar, S. (1997). Demand fluctuations and capacity utilization under duopoly. Economic Theory, 10(1), 131–146.

Gelman, J. R., & Salop, S. C. (1983). Judo economics: Capacity limitation and coupon competition. The Bell Journal of Economics, 14(2), 315–325.

Ghemawat, P. (1984). Capacity expansion in the titanium dioxide industry. The Journal of Industrial Economics, 33(2), 145–163.

Gujarati, D. (2003). Basic econometric (4th ed.). New York: McGraw-Hill.

Hannan, M. J., & Torries, T. F. (1989). Industry structure and capacity. In J. A. Cordes & T. F. Torries (Eds.), Surplus capacity in the international metals industry (pp. 1–12). Littleton, Colorado: Society for Mining Metallurgy.

Hay, D. A., & Liu, G. S. (1998). The investment behavior of firms in an oligopolistic setting. The Journal of Industrial Economics, 46(1), 79–99.

Henderson, J., & Cool, K. (2003). Learning to time capacity expansions: An empirical analysis of the worldwide petrochemical industry 1975–1995. Strategic Management Journal, 24(5), 393–413.

Kadiyali, V., & Conlin, M. (2006). Entry deterring capacity in the Texas lodging industry. Journal of Economics and Management Strategy, 15(1), 167–185.

Kirman, W. I., & Masson, R. T. (1986). Capacity signals and entry deterrence. International Journal of Industrial Organization, 4(1), 25–42.

Koscianski, J., & Mathis, S. (1995). Exccess capacity and the probability of entry: An application to the US titanium industry. Resource Policy, 21(1), 43–51.

Kottinen, J. (2002). Excess capacity as entry deterrence (Online paper). Retrieved from https://helda.helsinki.fi

Kulatilaka, N., & Perotti, E. C. (1992). Strategic investment timing under uncertainty. Working paper, Boston University.

Lieberman, M. B. (1987). Excess capacity as a barrier to entry: An empirical approach. The Journal of Industrial Economics, 35(4), 607–627. Malaysian Palm Oil Board (MPOB). Malaysian oil palm statistics (Various issues, 1986–2011). Kuala Lumpur: Ministry of Primary Industries.

Maskin, E. S. (1999). Uncertainty and entry deterrence. Economic Theory, 14(2), 429–437.

Maskin, E. S., & Tirole, J. (1988). A theory of dynamic oligopoly, I: Overview and quantity competition with large fixed costs. Econometrica, 65(3), 549–569.

Masson, R. T., & Shaanan, J. (1986). Excess capacity and limit pricing: An empirical test. Economica, New Series, 63(211), 365–378.

Mathis, S., & Koscianski, J. (1996). Excess capacity as a barrier to entry in the US titanium industry. International Journal of Industrial Organization, 15(2), 263–281.

MPIC. (2011). Statistics on commodities 2011. Putrajaya: Ministry of Plantation and Industries and Commodities.

Osborne, M., & Pitchik, C. (1987). Cartel, profit and excess capacity. International Economics Review, 28, 413–428. Palm Oil Registration and Licensing Authority (PORLA). (1976–1985). Annual Report PORLA Palm Oil Update (Various issues). Malaysia.

Röller, L.-H., & Sickles, R. C. (2000). Capacity and product market competition: Measuring market power in a ‘puppydog’ industry. International Journal of Industrial Organization, 18(6), 845–865.

Scherer, F. M., & Ross, D. (1990). Industrial market structure and economic performance (3rd ed.). Boston: Houghton-Mifflin.

Spence, A. M. (1977). Entry, capacity, investment and oligopolistic pricing. The Bell Journal of Economics, 8(2), 534–544.

Spulber, D. F. (1981). Capacity, output and sequential entry. The American Economic Review, 71(3), 503–514.

Tay, C. M. (2005). Strategic investment and excess capacity: A study of the Taiwanese flour industry. Journal of Applied Economics, 8(1), 153–170.

Tirole, J. (1988). The theory of industrial organization. Cambridge, Massachusetts: MIT Press.

Waldman, M. (1987). Non-cooperative entry deterrence, uncertainty, and the free rider problem. The Review of Economic Studies, 54(2), 301–310.

Wenders, J. T. (1971). Excess capacity as a barrier to entry. The Journal of Industrial Economics, 20(1), 14–19.

Wilson, R. (1992). Strategic model of entry deterrence. In R. J. Aumann & S. Hart (Eds.), The handbook of game theory with economic application, volume 1 (pp. 305–329). Amsterdam: Elsevier Science B.V.

Wood, A. (2005). Investment interdependence and the coordination of lumpy investments: Evidence from the British brick industry. Applied Economics, 37(1), 37–49.

Downloads

Published

01-12-2014

Issue

Vol. 18 (2014): Malaysian Management Journal (MMJ) Vol. 18, 2014

Section

Articles

How to Cite

Hin, C. W., Md Isa, F., & Hee, H. C. (2014). A Study of Perception of International Students on Quality of Malaysian Cars. Malaysian Management Journal, 18, 13-22. https://doi.org/10.32890/mmj2014.18.2

Research impact

Harvested 2026-09-07
0 citations recorded so far

Counts differ between services because each indexes a different body of literature. None of them is the whole picture.

Identifiers DOI 10.32890/mmj2014.18.2