In this paper, I introduce the developing economy of Malaysia as our subject of study. The nation has a high reliance on the cheaper foreign labour force that is regarded as more labour-productive in the economy, especially in lower-skilled industries such as agriculture, mining and construction. Nevertheless, debates about whether foreign labour demotivates effective capital adaption and technology transfer linger in society. This research purpose is to study about the effectiveness of foreign labour in the current economic model of Malaysia over time, in terms of technical efficiency they may exhibit. With successful collection of data from proprietary sources, as well as from the recent update of the open database from Malaysia’s official site, the paper is able to produce significant statistical results by forming state-level panel data for national analysis. Thus, the main finding of this paper is that foreign labour, despite being highly dependent on the producer side for production, exhibits a technical efficiency term. That is, foreign labour presence is regarded as an effective input in the economy as they are efficient in production. Another major significance of this paper is that we introduced an original methodology incorporating an elasticity-driven production function into Malaysia’s economy’s frontier production modelling process. Through the elasticity-driven production function, I found that labour inputs are overall inelastic. This raises future questions if Malaysia can continue to benefit the efficiency of labour inputs generated in future when capital inputs are growing more critical in the global trend. Future research may also be necessary to answer such questions.