ABSTRACT
This chapter attempts to address the sixth research objective, which is to explore the degree to which differences in regional manufacturing distribution and concentration have contributed to regional inequality. It discusses the incentives provided under the Investment Incentive Act and developing the industrial estates to promote the manufacturing sector and its effect on the output and labour contributed by state and regions. The chapter focuses on the distribution and concentration of export-oriented industries using 2-digit and 3-digit classification. In this subtopic, the researcher will extend the location quotient (LQ) technique that the LQ will not only depend on labour (L), but also all indicators in production function indicators. The chapter also discusses the investors' distribution and its concentration in Peninsular Malaysia. The Investment Incentive Act was replaced for two reasons, firstly to make investment in Malaysia more attractive and to have extra competitive advantage compared with other countries in the Association of Southeast Asian Nations (ASEAN) region.
