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Labor Skills and Foreign Direct Investment in a Dynamic Economy: Estimating the Knowledge-Capital Model for Singapore


  • Gnanaraj Chellaraj
  • Keith E. Maskus

    (University of Colorado at Boulder)

  • Aaditya Mattoo

    (The World Bank)


In this paper we analyze changes in the inbound and outbound investment between Singapore and a sample of industrialized and developing countries. The nature of Singapore's two-way investment with the industrialized nations has shifted into skill-seeking activities over the period, while Singapore's investments in developing countries have increased sharply and become concentrated in labor-seeking activities. Over the 1984-2003 period, as host Singapore became skill abundant relative to parent industrialized countries, average inbound investment stocks from these countries increased by US$ 24.8 billion annually, while the corresponding figure for outbound stocks to host developing countries was US$ 9.5 billion.

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  • Gnanaraj Chellaraj & Keith E. Maskus & Aaditya Mattoo, 2009. "Labor Skills and Foreign Direct Investment in a Dynamic Economy: Estimating the Knowledge-Capital Model for Singapore," Economics Study Area Working Papers 100, East-West Center, Economics Study Area.
  • Handle: RePEc:ewc:wpaper:wp100

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