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Technical efficiency of the Malaysian wooden furniture industry: a stochastic frontier production approach.


Citation

Radam, Alias and Yacob, Mohd Rusli and Mohd Muslim, Huda Farhana (2010) Technical efficiency of the Malaysian wooden furniture industry: a stochastic frontier production approach. International Business Research, 3 (3). pp. 10-15. ISSN 1913-9004

Abstract

Wood furniture industry is an important component in our manufacturing sector for it significantly contributes to the industrialization of Malaysia’s economy. Evaluating wood furniture industry’s level of efficiency is important to assist and provide a relative direction to small and medium firms on their business. The objective of this research is to examine the efficiency of wooden furniture industry by determining the technical efficiency using stochastic frontier production model. Results show that firm output is 54 per cent less than the maximal output which can be achieved from the existing inputs. The technical inefficiency on individual firm varies from 1.63 to 94.69 per cent and so does the potential to increase firm output from the existing inputs. This evidence suggests that many firms still operate below the efficiency level, confirming the conventional view that labor-intensive firms are most likely inefficient.


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Additional Metadata

Item Type: Article
Subject: Furniture - Malaysia.
Divisions: Faculty of Economics and Management
Publisher: Canadian Center of Science and Education
Keywords: Technical efficiency; Stochastic frontier model; Wooden furniture industry.
Depositing User: Emelda Mohd Hamid
Date Deposited: 04 Jun 2013 04:01
Last Modified: 02 Nov 2015 02:29
URI: http://psasir.upm.edu.my/id/eprint/16978
Statistic Details: View Download Statistic

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