EXPORT EXPANSION AND IMPORTED INPUT INTENSITY IN THE MALAYSIAN MANUFACTURING SECTOR

Abstract

The objective of this paper is twofold. First, it aims to evaluate the export performance of Malaysian manufacturing industries and the intensity of their imported input usage. Secondly, this paper aims to examine the validity of various claims that increasing demand for imported inputs in Malaysia has been mainly to cater for the export-oriented industries. This study found that more resource-based industries were export-oriented compared to the non-resource-based industries. It is also found that almost 70 percent of the manufacturing industries were highly imported input dependent, and that 93 percent of these industries were non-resource-based. Domestic-oriented industries were generally more highly dependent on imported inputs compared to the export-oriented industries. The analysis for the non-resource-based industries showed a positive relationship between export share and imported input content. The relationship, however, was negative for the resource-based industries.

JEL Classification: F140, L600, L700