Sains Malaysiana 50(8)(2021): 2445-2453

http://doi.org/10.17576/jsm-2021-5008-25

Efficiency Assessment of Transport Manufacturing Firms using a Stochastic Frontier Analysis Approach

(Penilaian Kecekapan Firma Pembuatan Pengangkutan menggunakan Suatu Pendekatan Analisis Stokastik Perbatasan)

AMMAR FIKREE MOHAMED JOFREE¹, NORAYATI HASHIM¹, MOHD FAHMY-ABDULLAH^1,3*, LAI WEI SIENG² & SULHI RIDZUAN³

¹Faculty of Technology Management & Business, Universiti Tun Hussein Onn Malaysia, 86400 Parit Raja, Batu Pahat, Johor Darul Takzim, Malaysia

²Faculty of Economic and Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor Darul Ehsan, Malaysia

³Oasis Integrated Group, Institute for Integrated Engineering, Universiti Tun Hussein Onn Malaysia, 86400 Parit Raja, Batu Pahat, Johor Darul Takzim, Malaysia

Received: 7 July 2020/Accepted: 18 December 2020

ABSTRACT

This paper aims to analyze the level of technical efficiency and determinants of technical inefficiency of transport manufacturing firms in Malaysia using Stochastic Frontier Analysis (SFA) approach from 2005 to 2010. Through SFA approach, hypothesis test is conducted in order to select Cobb-Douglas or Translog production function and testing the effects of technical inefficiencies. While the determining factors that been taken into account include the capital-labor ratio, training expenses, education level ratio, wage rate, information and communication technology expenditure, and firm size. Hypothesis test results show that the Cobb-Douglas production function is rejected. While the test for the effect of technical inefficiency shows its existence. Training expenses, secondary and tertiary education level ratios, wage rates and information and communication technology expenses are significant determinants for transportation manufacturing firms. However, the capital-labor ratio was found that it has reduced the level of technical efficiency. The implications of these results show that firms need to focus on investing in human capital, information technology and increase motivation among employees such as rising wage rates and reducing the use of capital appropriate to the technology.

Keywords: Manufacturing; stochastic frontier analysis; technical efficiency; technical inefficiency; transportation

ABSTRAK

Kertas ini bertujuan untuk menganalisis tahap kecekapan teknik dan faktor penentu ketidakcekapan teknik firma pembuatan pengangkutan di Malaysia menggunakan pendekatan AnalisisStokastik Perbatasan (SFA) dari tahun 2005 hingga 2010. Melalui pendekatan SFA, ujian hipotesis dijalankan terlebih dahulu untuk memilih fungsi pengeluaran Cobb-Douglas atau Translog dan ujian kesan ketidakcekapan teknik. Manakala faktor penentu yang diambil kira termasuklah nisbah modal-buruh, perbelanjaan latihan, nisbah tahap pendidikan, kadar upah, perbelanjaan teknologi maklumat dan komunikasi dan saiz firma. Keputusan ujian hipotesis menunjukkan fungsi pengeluaran Cobb-Douglas ditolak. Manakala ujian kesan ketidakcekapan teknik menunjukkan kewujudannya. Perbelanjaan latihan, nisbah tahap pendidikan menengah dan tinggi, kadar upah dan perbelanjaan teknologi maklumat dan komunikasi merupakan faktor penentu yang signifikan bagi firma pembuatan pengangkutan. Namun, nisbah modal-buruh didapati telah mengurangkan tahap kecekapan teknik. Implikasi daripada keputusan ini menunjukkan bahawa firma perlu menitikberatkan pelaburan terhadap modal manusia, teknologi maklumat dan meningkatkan motivasi di kalangan pekerja seperti kenaikan kadar upah serta pengurangan terhadap penggunaan modal yang sesuai dengan tahap teknologi.

Kata kunci: Analisisstokastik perbatasan; kecekapan teknik; ketidakcekapan teknik; pembuatan; pengangkutan

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*Corresponding author; email: mohdfahmy@uthm.edu.my