Selected Macroeconomic Determinants of Foreign Direct Investment Outflow of Singapore
The role of Foreign Direct Investment (FDI) outflow has become significant and essential for sustainable economic growth in Southeast Asia region particularly Singapore. The saturation of the domestic resources accumulation and as export-led regime, the government of Singapore introduced the regionalization policy in the 1990s to encourage abroad investment. Due to that, this study aims to investigate the determinants of Singapore FDI outflows from the perspective of selected macroeconomics variables namely income, trade openness, interest rate and exchange rate. This study adopted the Johansen and Juselius cointegration test and Granger causality based on vector error correction model to investigate the annually data from 1975 to 2007. Empirical results indicated that FDI outflow of Singapore is positively associated with income while inverse linkage with trade openness, interest rate and exchange rate in the long run. Moreover, exchange rate has the tendency to have greater influence towards the FDI outflow of Singapore in relative to the other determinants. Meanwhile, income, trade openness and interest rate portrayed causality linkage towards FDI outflow of Singapore, except for exchange rate in the short run. The continuous commitment towards economic integration in the East Asia region via the Free Trade Area has further contributed to the expansion of FDI outflow of Singapore in the future.
|Date of creation:||Jun 2010|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Scaperlanda, Anthony & Balough, Robert S., 1983. "Determinants of U.S. direct investment in the E.E.C. : Revisited," European Economic Review, Elsevier, vol. 21(3), pages 381-390, May.
- Lall, Sanjaya, 1980. "Monopolistic Advantages and Foreign Involvement by U.S. Manufacturing Industry," Oxford Economic Papers, Oxford University Press, vol. 32(1), pages 102-122, March.
- 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.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Guy V. G. Stevens, 1993. "Exchange rates and foreign direct investment: a note," International Finance Discussion Papers 444, Board of Governors of the Federal Reserve System (U.S.).
- Thomas A. Pugel, 1981. "The determinants of foreign direct investment: An analysis of US manufacturing industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 2(4), pages 220-228, December.
- Daniel Pick & Utpal Vasavada, 1998. "Exchange Rate Effects on the Relationship between FDI and Trade in the U.S. Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1073-1079.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:25920. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.