Outward FDI, merchandise and services trade: evidence from Singapore
AbstractThis paper aims to explore the causality pattern between outward foreign direct investment (OFDI) and major external trade components (i.e. exports and imports of merchandise as well as services) using Singapore as a case study, since it is one of the largest outward investors in the Asian region and it is overtly trade-dependent. The findings reveal that there is evidence of an OFDI-led trade hypothesis, particularly with regard to merchandise exports and imports, which is an indication OFDI opens important channels for intra-firm trade activities, home country sourcing and backward integration. However, there is no evidence of causality relationships between Singapore's OFDI and services trade because the purpose of such services is mainly to provide a market presence in the consuming country. As such, Singaporean multinationals are likely to outsource their services either from the host country services sector or from their own services-supporting subsidiaries that have been relocated abroad. The present study provides implications for policy formulation to strengthen OFDI-services trade linkages.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Journal of Business Economics and Management.
Volume (Year): 14 (2013)
Issue (Month): 2 (April)
Contact details of provider:
Other versions of this item:
- Wong, Koi Nyen & Goh, Soo Khoon, 2011. "Outward FDI, merchandise and services trade: evidence from Singapore," MPRA Paper 35377, University Library of Munich, Germany.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Toda, Hiro Y & Phillips, Peter C B, 1993.
"Vector Autoregressions and Causality,"
Econometric Society, vol. 61(6), pages 1367-93, November.
- Linda S. Goldberg & Michael W. Klein, 1999.
"International trade and factor mobility: an empirical investigation,"
81, Federal Reserve Bank of New York.
- Linda S. Goldberg & Michael W. Klein, 1999. "International Trade and Factor Mobility: An Empirical Investigation," NBER Working Papers 7196, National Bureau of Economic Research, Inc.
- Bruce A. Blonigen, 1999.
"In Search of Substitution Between Foreign Production and Exports,"
NBER Working Papers
7154, National Bureau of Economic Research, Inc.
- Blonigen, Bruce A., 2001. "In search of substitution between foreign production and exports," Journal of International Economics, Elsevier, vol. 53(1), pages 81-104, February.
- Gene M. Grossman & Elhanan Helpman, 1990.
"Product Development and International Trade,"
NBER Working Papers
2540, National Bureau of Economic Research, Inc.
- Grossman, Gene M. & Helpman, Elhanan, 1989. "Product Development and International Trade," Scholarly Articles 3445094, Harvard University Department of Economics.
- Grossman, G.M. & Helpman, E., 1988. "Product Development And International Trade," Papers 132, Princeton, Woodrow Wilson School - Public and International Affairs.
- Goh, Soo Khoon & Wong, Koi Nyen, 2011. "Malaysia's outward FDI: The effects of market size and government policy," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 497-510, May.
- Ellingsen, Gaute & Likumahuwa, Winfried & Nunnenkamp, Peter, 2006. "Outward FDI by Singapore : a different animal?," Open Access Publications from Kiel Institute for the World Economy 3947, Kiel Institute for the World Economy (IfW).
- Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
- Clausing, Kimberly A, 2000. "Does Multinational Activity Displace Trade?," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 190-205, April.
- Helpman, Elhanan, 1984.
"A Simple Theory of International Trade with Multinational Corporations,"
Journal of Political Economy,
University of Chicago Press, vol. 92(3), pages 451-71, June.
- Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Scholarly Articles 3445092, Harvard University Department of Economics.
- Roger Svensson, 1996. "Effects of overseas production on home country exports: Evidence based on Swedish multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(2), pages 304-329, September.
- Ma, Yue & Morikawa, Koichiro & Shone, Ronald, 2000. "A macroeconomic model of direct investment in foreign affiliates of Japanese firms," Japan and the World Economy, Elsevier, vol. 12(4), pages 311-335, December.
- S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
- Head, Keith & Ries, John, 2001. "Overseas Investment and Firm Exports," Review of International Economics, Wiley Blackwell, vol. 9(1), pages 108-22, February.
- Lipsey, Robert E & Weiss, Merle Yahr, 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 304-08, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.