IDEAS home Printed from https://ideas.repec.org/a/ris/eaerev/0358.html
   My bibliography  Save this article

Estimating the Knowledge Capital Model for Foreign Investment in Services: The Case of Singapore

Author

Listed:
  • Chellaraj, Gnanaraj

    (World Bank)

  • Mattoo, Aaditya

    (World Bank)

Abstract

Singapore’s inward and outward investments with industrialized countries in both manufacturing and service sectors were skill seeking while outward investments to developing countries were labor seeking. Applying the Knowledge-Capital model, it was found that services Foreign Direct Investment is sensitive to skill differences. A tenpercent decline in skill differences with industrialized countries resulted in a 4.25 percent rise in inbound manufacturing and 1.48 percent rise in inbound services investments. Meanwhile, a ten-percent increase in skill differences with developing countries resulted in a 30 percent rise in outbound manufacturing and 0.38 percent rise in services investments. Furthermore, when services are distinguished by skill-intensity, the impact of relative skill endowments on inbound Foreign Direct Investment in skill-intensive services is significantly different from the impact on other services. However, when services are disaggregated by “proximity” needs, we do not find any significant difference in the impact of relative skill endowments on Foreign Direct Investment.

Suggested Citation

  • Chellaraj, Gnanaraj & Mattoo, Aaditya, 2019. "Estimating the Knowledge Capital Model for Foreign Investment in Services: The Case of Singapore," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 23(2), pages 111-147, June.
    • Handle: RePEc:ris:eaerev:0358
    DOI: 10.11644/KIEP.EAER.2019.23.2.358
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.11644/KIEP.EAER.2019.23.2.358
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.11644/KIEP.EAER.2019.23.2.358?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Foreign Direct Investment; Manufacturing; Services; Skills; Proximity;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:eaerev:0358. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: JE Lee (email available below). General contact details of provider: https://edirc.repec.org/data/kieppkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.