Abstract
The palm oil refinery industry continued to rise as Malaysia’s key trade, following the nation’s transitional economy in the early 1970s. Known as the workhorse of its industry, palm oil refinery began to boom with the early establishment of refineries in several states throughout east and west Malaysia. However, in recent years, it was reported that the establishment of licensed refineries in the country recorded a rise in numbers, and yet the companies did not step up into the market as planned. The issue of industrial competitiveness was put into question by the decreasing rate of new entrants. In this study, the logit model was adopted to identify entry-related factors in the industry. The prescribed period of study was set between 2005 and 2013, involving 52 firms in operation in the Malaysian palm oil refining industry, where their annual reports were obtained from the Companies Commission of Malaysia (CCM). The empirical results implied that profit, distribution, marketing intensity, coupled with minimum efficient scale and growth were all significant and carried the correct coefficient signs.
Highlights
Since Malaysia’s independence in 1957, tremendous economic transformation has provided great new opportunities for the country’s palm oil refining industry
The researcher would look into the determinants of entry within the Malaysian palm oil refining industry, from 2005 to 2013
By utilising the financial statements obtained from the Companies Commission of Malaysia (CCM) involving 52 refinery firms from 2005 to 2013, the independent variables in this study are inclusive of past profit rate, growth, minimum efficient of scale, capital requirement, distribution and marketing intensity and concentration ratio
Summary
Since Malaysia’s independence in 1957, tremendous economic transformation has provided great new opportunities for the country’s palm oil refining industry. According to Ahmad (2012), following economic transition plans in the early 1970s, Malaysia’s palm oil refining industry has been known as the workhorse of the palm oil industry. It began to boom with the establishment of refineries in several states in the early days, spreading from Peninsular Malaysia to Sabah and Sarawak in recent years. Entry had been rather slow with a record of 48 new firms in 2005, which increased to 54 in 2014. Despite owning licences to operate, these refineries did not enter the industry as planned. We should consider the reason as to why refineries with licences did not start operation as planned
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
