EFFECT OF FOREIGN DIRECT INVESTMENT ON LABOUR PRODUCTIVITY

This study has utilised the Seemingly Unrelated Regression (SUR) estimator method to explore spillover effects of “technology” and “knowledge” from foreign direct investment (FDI) on Malaysian labour productivity. The focus was medium-low technology low-technology industries 2000 2018. findings showed that presence FDI spillovers as diffusion channels increased productivity were greater through “technology effects” compared “learning for both types industries. A cross-comparison results technological between investor countries revealed Singaporean Japanese multinational corporations (MNCs) contributed most significant in increasing productivity, with being noticeable These seem suggest are still concentrated sectors low-capacity technologies commensurate required level workforce capability. negative relationship found this seems illustrate absorptive capacity local workers absorb high-skill-based MNCs is at a low recommended strategies mechanisms should be devised accordingly assist their effort improve knowledge transfers, while simultaneously acknowledging constraints human factors, capacity, competition resources or ethical dilemmas cultural barriers.