Role of technological capability on firm performance among palm oil mills in Malaysia / Sima Parvand

Sima , Parvand (2020) Role of technological capability on firm performance among palm oil mills in Malaysia / Sima Parvand. PhD thesis, Universiti Malaya.

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Abstract

In spite of its strong economic performance since the 1970s, oil palm mills in Malaysia has faced low technological upgrading. Although the import of capital goods has acted as an effective channel for technology transfer (TT), the lack of strong firm-level in-house upgrading and the presence of barriers has affected mill efficiency levels. Hence, this thesis seeks to examine how firm-level technological capability development (TC) has impacted on firm performance. A quantitative research design using simple random sampling procedure was deployed to gather responses from 54 palm oil mills in Malaysia. The multiple regression analyses revealed that innovation strategy, TT, government support, and size of mills impacted on TC development very strongly, while organization learning, strategy alliance, and type of ownership were insignificant. In addition, innovation types and R&D capability show significant relationships with firm performance. Also, R&D capability and innovation performance influences significantly marketing performance. The findings also highlight the complexity and cost of new technologies as technological barriers. The lack of financial resources and technical skills have posed as organizational barriers to TC development. The lack of government policy as also affected the shift to greening environment practices and the adoption of advanced processing technologies. The results also show that top management support and increasing the size of mills positively raise the adoption of advanced processing technologies and firm performance. However, the findings indicate that all significant factors have been critical to non-adopters, whereas complexity, top management support, technical skill, and size of mills were the most critical factors for adopters. This thesis complements past works by showing evidence that TC development has a strong impact on firm performance in oil palm mills. Secondly, it complements the resource-based view (RBV) and evolutionary theories that effective links between firm resources and capabilities are critical to drive firm performance. Policy-wise, firstly, the thesis makes the point that new technologies development and diffusion is important to quicken technological upgrading in palm oil mills. Secondly, it calls for governments to review their incentives and policies to improve TC development. Thirdly, there is a need for top management to support greening and new technology development strategies in the oil palm mills.

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