Outward FDI, merchandise and services trade: evidence from Singapore
This paper aims to explore the causality pattern between OFDI and major external trade components (i.e. exports and imports of merchandise as well as services) using Singapore as a case, since it is one of the largest outward investors in the Asian region, and is overtly trade-dependent. The findings reveal that there is evidence of OFDI-led trade hypothesis, particularly, merchandise exports and imports, an indication for OFDI to open up important channels for intra-firm trade activities, home country sourcing and backward integration. However, there is no evidence of causality relationships between Singapore’s OFDI and services trade because the nature of services is mainly to provide market presence in the consuming country. As such, Singaporean multinationals are likely to outsource their services either from the host country services sector or their own services-supporting subsidiaries that have been relocated abroad. The present study provides implications for policy formulation on strengthening the OFDI-services trade linkages.
|Date of creation:||Jul 2011|
|Date of revision:|
|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.:
- S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
- James R. Markusen & Anthony J. Venables, 1995.
"Multinational Firms and The New Trade Theory,"
NBER Working Papers
5036, National Bureau of Economic Research, Inc.
- Grossman, Gene M & Helpman, Elhanan, 1989.
"Product Development and International Trade,"
Journal of Political Economy,
University of Chicago Press, vol. 97(6), pages 1261-83, December.
- Gene M. Grossman & Elhanan Helpman, 1988. "Product Development and International Trade," NBER Working Papers 2540, National Bureau of Economic Research, Inc.
- Grossman, G.M. & Helpman, E., 1988. "Product Development And International Trade," Papers 132, Princeton, Woodrow Wilson School - Public and International Affairs.
- Helpman, Elhanan & Grossman, Gene M., 1989. "Product Development and International Trade," Scholarly Articles 3445094, Harvard University Department of Economics.
- Head, Keith & Ries, John, 2001. "Overseas Investment and Firm Exports," Review of International Economics, Wiley Blackwell, vol. 9(1), pages 108-22, February.
- Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
- Bruce A. Blonigen, 1999.
"In Search of Substitution Between Foreign Production and Exports,"
NBER Working Papers
7154, National Bureau of Economic Research, Inc.
- Blonigen, Bruce A., 2001. "In search of substitution between foreign production and exports," Journal of International Economics, Elsevier, vol. 53(1), pages 81-104, February.
- Ma, Yue & Morikawa, Koichiro & Shone, Ronald, 2000. "A macroeconomic model of direct investment in foreign affiliates of Japanese firms," Japan and the World Economy, Elsevier, vol. 12(4), pages 311-335, December.
- Linda S. Goldberg & Michael W. Klein, 1999.
"International Trade and Factor Mobility: An Empirical Investigation,"
NBER Working Papers
7196, National Bureau of Economic Research, Inc.
- Linda S. Goldberg & Michael W. Klein, 1999. "International trade and factor mobility: an empirical investigation," Staff Reports 81, Federal Reserve Bank of New York.
- Toda, Hiro Y & Phillips, Peter C B, 1993.
"Vector Autoregressions and Causality,"
Econometric Society, vol. 61(6), pages 1367-93, November.
- Helpman, Elhanan, 1984.
"A Simple Theory of International Trade with Multinational Corporations,"
3445092, Harvard University Department of Economics.
- Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-71, June.
- Clausing, Kimberly A, 2000. "Does Multinational Activity Displace Trade?," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 190-205, April.
- Roger Svensson, 1996. "Effects of overseas production on home country exports: Evidence based on Swedish multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 132(2), pages 304-329, September.
- Markusen, James R., 1984. "Multinationals, multi-plant economies, and the gains from trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 205-226, May.
- Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
- Goh, Soo Khoon & Wong, Koi Nyen, 2011. "Malaysia's outward FDI: The effects of market size and government policy," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 497-510, May.
- Lipsey, Robert E & Weiss, Merle Yahr, 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 304-08, May.
- Ellingsen, Gaute & Likumahuwa, Winfried & Nunnenkamp, Peter, 2006. "Outward FDI by Singapore : a different animal?," Open Access Publications from Kiel Institute for the World Economy 3947, Kiel Institute for the World Economy (IfW).
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:35377. 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.