The present analysis measures and evaluates the efficiency performance of Malaysian manufacturing industries based on panel estimation methods of a stochastic frontier production function. OUT findings suggest that· the Malaysian manufacturing industries “are relatively efficient, having the average technical efficiency levels of more than 70 per cent. Still some industries have been identified to have low levels of technical efficiency. These include Leather and Leather Products, Iron and Steel, Paper and Paper Products, Non Ferrous Metals, and Food. In addition, we also find that several industries have a reduction in the efficiency levels over time. Among them are Leather and Leather Products, Paper and Paper Products, Non-Ferrous Metals, other Chemical Products, and Electrical Machinery. Accordingly, to survive the upcoming liberalized markets, adjustments to boost efficiency levels in these industries need to be made.
