Abstract

Malaysia is among the world’s top 20 trading nations. This is due to the structural change in the Malaysian economy that turned the country from an exporter of primary commodities into an exporter of high value-added manufactured products.  In Malaysia, E&E forged a strong foundation over the last 3 decades, which provides new opportunities for such investments.  This study analyzed the structural effect on export competitiveness of Malaysia E&E products focusing on semiconductor (SITC 776), Telecommunication product (SITC 764), Electrical machinery, Apparatus, Part and necessary (SITC 772), Printed Circuit Board (SITC 759) and Disk drives, printers and PCs (SITC 752).  Further, the study used the Constant Market Share (CMS) and Revealed Comparative Advantage (RCA) framework to analyze the extent of the export competition between Malaysia and other competitor economies.  Overall, CMS result showed that, in the first sub-period (1990-1994), Malaysia E&E export was competitive in the four markets studied, namely the USA, Singapore, Japan and Hong Kong.  However, in the second and third period, CMS result showed that Malaysia E&E export increased  not due to market competitiveness but due to the structural effect - that is, due to an increase in the world import.   In terms of export performance ratio, RCA results showed that, Malaysia E&E products was highly perform only  in the US market,  for almost all SITC.  Indonesia has monopolized the Singapore market and Hong Kong was dominated by China.  However, Malaysia E&E export to the world generally has comparative advantage over other competitors namely Indonesia, Thailand and China.  The study also revealed that Malaysia has higher export capacity  compared  to other countries besides the USA, Singapore, Japan and Hong Kong.   Therefore, the argument saying that China will intensify the competitiveness of Malaysia E&E market is questionable since the study could not reveal the comparative advantage held by China.  The study found that China only dominated in the Hong Kong Market for almost all SITC studied.

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