Dynamics of Japanese foreign direct investment (jfdi) in electronic and electrical (E&E) Manufacturing sector in Malaysia
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Date
2011
Authors
Swee Ean, Tan
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Abstract
This research focuses on the dynamics of JFDI in E&E manufacturing sector
particularly the significance changes and the potential development in Malaysia This study
commenced with significant statistical data from Toyo Keizai Data Bank 2008 revealing the
trend of JFDI and its essential catalytic role in E&E manufacturing function, employment,
R&D, export and import particularly in China, NIEs and ASEAN. Inevitably an intense
competition emerged from the potential huge market of China and the newly virgin market of
Vietnam. With Japanese investors perception oriented methodology, the research objectives
encompassed (i) to identify the key attraction factors in Malaysia, (ii) to assess the strategy
and effectiveness of R&D in Japanese advanced technology and scientific knowledge
transfer, (iii) to evaluate the Malaysian labor productivity, (iv) to identify solution to
overcome the deficit resulted from the imbalance trade between Japan and Malaysia, and (v)
to learn the strategy in remaining Malaysia an ideal competitive investment location in Asia
region. During the fieldwork in Japan, the primary data of 23% responded from the
population of 87 Japanese E&E manufacturing firms running operation plants in Malaysia.
Simultaneously invaluable insights acquired from face-to-face discussion with 6 Japanese
experts in Japan. The Japanese E&E manufaeturing plants mostly clustered at the potential
industrial estates located in Northern Industrial Region, Central Industrial Region and
Southern Industrial Region in Peninsular Malaysia. The empirical findings revealed the
dominant key attraction of well-developed infrastructure and traffic satisfied the most.
Additionally with supportive ICT, Central Industrial Region emerged as a prominent
agglomerated R&D function location for top Japanese leading E&E firms namely M€1tsushita
(Panasonic) and Sharp Corporation in Southeast Asia region. Skill of labor a'ld midmanagement
is satisfactory, but the increasing labor cost resulted from shortage of labor has
impacted the total production cost. Strategic diversifications comprising "kaizen" has been
implemented, the labor productivity has yet to reach the expected level. The significant role
of SMEs in logistics function for part supply is essential to overcome the excess import of
raw material and parts. Market"i'n g and sale, and R&D functions added competitive strength
for Malaysia in hosting Japanese E&E manufacturing plants for long term in Asia region.
Description
Keywords
Japanese foreign , Manufacturing Sector