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Economic growth and technological catching up by Singapore to the USA

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  • Lim, Lee K
  • McAleer, Michael

Abstract

The high growth performance of Singapore can be attributed largely to the rapid inflows of foreign direct investment (FDI). It is generally accepted that FDI brings not only additional capital to the host country, but also the transfer of advanced technology and management skills. The catching up hypothesis states that the lagging country, with low initial income and productivity levels, will tend to grow more rapidly by copying the technology from the leader country, without having to bear the associated costs of research and development. Given the important effects of technological change on growth, this paper examines whether Singapore is catching up technologically to the technology leader (USA). The paper applies two different time series tests of technological catching up, namely the Dickey–Fuller-type unit root test and a test based on the Verspagen model. The empirical evidence suggests technological catching up by Singapore to the USA.

Suggested Citation

  • Lim, Lee K & McAleer, Michael, 2002. "Economic growth and technological catching up by Singapore to the USA," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 59(1), pages 133-141.
  • Handle: RePEc:eee:matcom:v:59:y:2002:i:1:p:133-141
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    References listed on IDEAS

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    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. Miguel S. Aubyn, 1999. "Convergence across industrialised countries (1890-1989): new results using time series methods," Empirical Economics, Springer, vol. 24(1), pages 23-44.
    3. McAleer, Michael, 1994. " Sherlock Holmes and the Search for Truth: A Diagnostic Tale," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 317-370, December.
    4. Oxley, Les & Greasley, David, 1995. "A Time-Series Perspective on Convergence: Australia, UK and USA since 1870," The Economic Record, The Economic Society of Australia, vol. 71(214), pages 259-270, September.
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    Cited by:

    1. Habibullah, M.S. & Dayang-Afizzah, A.M. & Liew, Venus Khim-Sen & Lim, Kian-Ping, 2008. "Testing nonlinear convergence in Malaysia,1965-2003," MPRA Paper 12110, University Library of Munich, Germany.
    2. Gholami, Roghieh & Lee, Sang-Yong Tom & Heshmati, Almas, 2005. "The Causal Relationship between ICT and FDI," WIDER Working Paper Series 026, World Institute for Development Economic Research (UNU-WIDER).

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