• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
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HOME > Archive > 2015 > Volume 3 Number 2 (Feb. 2015) >
JOEBM 2015 Vol.3(2): 216-220 ISSN: 2301-3567
DOI: 10.7763/JOEBM.2015.V3.183

Do Downsizing and Global Financial Crisis Affect SMIs Labour Productivity in Malaysia?

N. A. Ibrahim, R. Suhaimi, and F. N. Chong

Abstract—This paper examines the effect of downsizing and global financial crisis on the labour productivity of the manufacturing industries in Malaysia. Due to the crisis, many industries retrenched their workers to adjust to the declining demand in their respective industries. Two distinctive subindustries that have the highest retrenchment rates are the manufacturing of radio, television and communication (27%) and the manufacturing of rubber and plastics (13.3%) out of total retrenchments within the last three years (2009-2011). The main reason for the downsizings is the deteriorating demand for their products. Using panel data analysis with fixed effects on monthly data from 2003 till August 2011, the study finds that the global financial crisis has positively affected labour productivity of the SMIs but it has negatively affected the large ones. Downsizing activities among the SMIs did not have a significant impact on labour productivity of industries in general.

Index Terms—Downsizing, financial crisis, smis, productivity.

N. A. Ibrahim and R. Suhaimi are with the Department of Economics, Faculty of Business Management, Universiti Teknologi MARA Malaysia (e-mail: nurhani.ai@gmail.com, rositasu@sarawak.uitm.edu.my)
F. N. Chong is with the Department of Finance, Faculty of Business Management, Universiti Teknologi MARA Malaysia (e-mail: fenneechong@sarawak.uitm.edu.my)

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Cite: N. A. Ibrahim, R. Suhaimi, and F. N. Chong, "Do Downsizing and Global Financial Crisis Affect SMIs Labour Productivity in Malaysia?," Journal of Economics, Business and Management vol. 3, no. 2, pp. 216-220, 2015.

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