Nordin Haji Mohamad

Operations Research Technique and the Decomposition of Productivity Growth in Selected Malaysian Listed Companies

The purpose of this paper is to investigate the total factor productivity growth performance of selected Malaysian listed companies with reference to adoption and adaptation of technology. To do this, we utilize the linear programming based operations research technique known as Data Envelopment Analysis (DEA) methodology of Malmquist index of total factor productivity, TFP. The decomposition of TFP into technological change and technical efficiency change is useful in distinguishing innovation or adoption of new technology by best practice firms from the diffusion of technology. Data on 114 selected Malaysian listed companies for the period 2008–2011 are utilized in the study. Results obtained are analyzed and discussed, and some policy implications are suggested. KeywordsData envelopment analysis, Malmquist productivity index, technological change, technical efficiency change.