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The Impact of R&D on the Singapore Economy:An Empirical Evaluation

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Author Info

  • Yuen Ping Ho

    (Entrepreneurship Centre, National University of Singapore)

  • Poh Kam Wong

    (Entrepreneurship Centre, National University of Singapore)

  • Mun Heng Toh

    (School of Business, National University of Singapore)

Abstract

Much of the literature on the impact of R&D on economic performance is founded on the advanced countries, where the intensity of R&D expenditure has been relatively high and stable for many years. In this paper, we provide empirical estimates of the impact of R&D on the economic growth of a Newly Industrialised Economy, Singapore, where R&D expenditure intensity has been low initially, bur rising rapidly in recent years. The Cobb-Douglas based analysis provided empirical evidence that R&D investment in Singapore had a significant impact on its total factor productivity performance in the last 20 years and established a long-term equilibrium relationship between R&D investments and TFP. However, compared to the OECD nations, the impact of R&D investment on economic growth in Singapore is not as strong, as evidenced by lower estimated elasticity values. The long run elasticity of output with respect to R&D was computed to be 8.1% for Singapore compared to long run elasticities of over 10% estimated by other researchers for OECD countries. This suggests that Singapore still has some way to go in catching up with the advanced nations in terms of R&D productivity. This not only means increasing the level of R&D intensity in Singapore but also more efficient exploitation of domestic R&D activity.

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Bibliographic Info

Paper provided by EconWPA in its series Macroeconomics with number 0508003.

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Date of creation: 03 Aug 2005
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Handle: RePEc:wpa:wuwpma:0508003

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Web page: http://128.118.178.162

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Keywords: Economic Growth; R&D Expenditure; Total Factor Productivity;

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Cited by:
  1. Pop-Silaghi, Monica & Jude, Cristina & Alexa, Diana & Litan, Cristian, 2012. "Do business and public sector research and development expenditures contribute to economic growth in central and eastern European countries? A dynamic panel estimation," Economics Discussion Papers 2012-4, School of Economics, Kingston University London.

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