Outsourcing and Labour Productivity: Case of Singapore Manufacturing Sector
This paper is devoted to empirical investigations of the effects of international outsourcing on labour productivity using the five-digit SIC Singapore’s manufacturing industry data. There are two types of international outsourcing this paper takes into consideration. The first is international outsourcing of materials input, which follows the narrow definition of materials outsourcing put forward by Feenstra and Hanson (1999) and is thus concerned mainly with intraindustry imports of intermediate materials. The other is international outsourcing of services input pertaining to inter-industry imports of services. Our empirical framework reveals that Singapore’s manufacturing sector thrived on international outsourcing of materials input as a key engine of observed labour productivity enhancement.
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