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Outsourcing And Fragmentation In Singapore'S Manufacturing Industry

Author

Listed:
  • SHANDRE M. THANGAVELU

    (Department of Economics, National University of Singapore, 1 Arts Link, Block AS2, Level 6, Singapore 117570, Singapore)

  • MUN HENG TOH

    (Department of Business Policy, National University of Singapore, Singapore)

  • KWAN KEE NG

    (Asia Competitiveness Institute, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore)

Abstract

This paper studies the impact of outsourcing on productive performance of manufacturing industries in Singapore. The paper develops an outsourcing measure based on the narrow definition of intermediate imports given by Feenstra and Hanson (1996, 1999). Based on the input-output tables, the study uses 5-digit industrial-level classifications to measure the impact of outsourcing on productivity of the manufacturing industries in Singapore from 1995–2004. The outsourcing measure is further decomposed by import of services, import of IT services and import of business services. This decomposition allows us to study the impact of outsourcing of services in addition to the cross-border fragmentation of products and components. The results suggest strong positive impact of cross-border sourcing on the productivity of the manufacturing sector. The decomposition of outsourcing measure indicates that the manufacturing industries are more involved in cross-border sourcing of services, particularly in business services.

Suggested Citation

  • Shandre M. Thangavelu & Mun Heng Toh & Kwan Kee Ng, 2008. "Outsourcing And Fragmentation In Singapore'S Manufacturing Industry," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(03), pages 539-557.
    • Handle: RePEc:wsi:serxxx:v:53:y:2008:i:03:n:s0217590808003099
    DOI: 10.1142/S0217590808003099
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    References listed on IDEAS

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    1. Pol Antràs & Luis Garicano & Esteban Rossi-Hansberg, 2006. "Offshoring in a Knowledge Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 31-77.
    2. Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
    3. Ramkishen S. Rajan (ed.), 2003. "Sustaining Competitiveness in the New Global Economy," Books, Edward Elgar Publishing, number 3102.
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    Cited by:

    1. Sandip Chakraborty & Ram Kumar Kakani & Bernadette C. Canasa, 2017. "Impact of International Outsourcing on Domestic Wage of Singapore Manufacturing Sector," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(6), pages 82-97, June.

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