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Structural Changes and the Impact of FDI on Singapore's Manufacturing Activities

Author

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  • Shandre Mugan Thangavelu

    (Jeffrey Cheah Institute for Southeast Asia, Sunway University and Institute for International Trade, University of Adelaide)

Abstract

This chapter examines the investment and foreign direct investment (FDI) policy of Singapore's economy in terms of the structural transformation of the economy from 1998 to 2018. The study also examines the impact of FDI on the productivity of the Singapore manufacturing industries in a panel framework from 2017 to 2019. The results indicate that FDI activities have a positive impact on labour productivity. The export activities of multinational businesses have a positive impact on labour productivity. We also observe agglomeration effects from FDI activities (average FDI activities over 3 years) in Singapore's manufacturing industries. However, we observe a negative impact of outsourcing labour productivity. The study also derives policy implications for forwardlooking policies in terms of the position of Singapore in the global production value chain.

Suggested Citation

  • Shandre Mugan Thangavelu, 2023. "Structural Changes and the Impact of FDI on Singapore's Manufacturing Activities," Working Papers DP-2023-06, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2023-06
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    References listed on IDEAS

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