[KSCI] Korea Science Citation Index Service

http://dx.doi.org/10.11644/KIEP.EAER.2019.23.2.358

Estimating the Knowledge Capital Model for Foreign Investment in Services: The Case of Singapore

Chellaraj, Gnanaraj (World Bank)
Mattoo, Aaditya (World Bank)

Publication Information

East Asian Economic Review / v.23, no.2, 2019 , pp. 111-147 More about this Journal

Abstract

Singapore's inward and outward investments with industrialized countries in both manufacturing and service sectors were skill seeking while outward investments to developing countries were labor seeking. Applying the Knowledge-Capital model, it was found that services Foreign Direct Investment is sensitive to skill differences. A ten-percent decline in skill differences with industrialized countries resulted in a 4.25 percent rise in inbound manufacturing and 1.48 percent rise in inbound services investments. Meanwhile, a ten-percent increase in skill differences with developing countries resulted in a 30 percent rise in outbound manufacturing and 0.38 percent rise in services investments. Furthermore, when services are distinguished by skill-intensity, the impact of relative skill endowments on inbound Foreign Direct Investment in skill-intensive services is significantly different from the impact on other services. However, when services are disaggregated by "proximity" needs, we do not find any significant difference in the impact of relative skill endowments on Foreign Direct Investment.

Keywords

Foreign Direct Investment; Manufacturing:Services; Skills; Proximity;

Citations & Related Records

Times Cited By KSCI : 1 (Citation Analysis)

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