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Modelling Small Economy Exports : The Case of Singapore

Author

Listed:
  • Tilak Abeysinghe

    (Singapore Centre for Applied and Policy Economics)

  • Keen Meng Choy

Abstract

This paper sheds further light on the debate spearheaded by Riedel (1988) on the specification of a small country export function. The theoretical and empirical analysis in the paper shows that while the price-taker assumption cannot be rejected, the export function for Singapore should not be construed as a standard export supply equation. As argued by Kapur (1983) instead, it is an export function with both demand and supply factors playing a role. We arrived at the final model specification by taking into consideration changes in the import content of exports over time. The paper also provides a new methodology for deriving a quarterly series of manu7facturing net capital stock.

Suggested Citation

  • Tilak Abeysinghe & Keen Meng Choy, 2005. "Modelling Small Economy Exports : The Case of Singapore," Trade Working Papers 21980, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:tradew:21980
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    References listed on IDEAS

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    1. Athukorala, Premachandra & Riedel, James, 1994. "Demand and Supply Factors in the Determination of NIE Exports: A Simultaneous Error-Correction Model for Hong Kong: A Comment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1411-1414, November.
    2. Muscatelli, V A & Srinivasan, T G & Vines, D, 1992. "Demand and Supply Factors in the Determination of NIE Exports: A Simultaneous Error-Correction Model for Hong Kong," Economic Journal, Royal Economic Society, vol. 102(415), pages 1467-1477, November.
    3. Riedel, James, 1988. "The Demand for LDC Exports of Manufactures: Estimates from Hong Kong," Economic Journal, Royal Economic Society, vol. 98(389), pages 138-148, March.
    4. Kapur, Basant K., 1983. "A short-term analytical model of the Singapore economy," Journal of Development Economics, Elsevier, vol. 12(3), pages 355-376, June.
    5. Phillips, Peter C B, 1994. "Some Exact Distribution Theory for Maximum Likelihood Estimators of Cointegrating Coefficients in Error Correction Models," Econometrica, Econometric Society, vol. 62(1), pages 73-93, January.
    6. Prema-Chandra Athukorala & James Riedel, 1996. "Modelling NIE exports: Aggregation, quantitative restrictions and choice of econometric methodology," Journal of Development Studies, Taylor & Francis Journals, vol. 33(1), pages 81-98.
    7. Tilak Abeysinghe, 2000. "Electronics and growth cycles in Singapore," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1657-1663.
    8. Muscatelli, Vito Antonio & Stevenson, Andrew A & Montagna, Catia, 1995. "Modeling Aggregate Manufactured Exports for Some Asian Newly Industrialized Economies," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 147-155, February.
    9. Riedel, James, 1984. "Trade as the Engine of Growth in Developing Countries, Revisited," Economic Journal, Royal Economic Society, vol. 94(373), pages 56-73, March.
    10. Leamer, Edward E, 1981. "Is It a Demand Curve, or Is It a Supply Curve? Partial Identification through Inequality Constraints," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 319-327, August.
    11. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    12. Gulasekaran Rajaguru & Tilak Abeysinghe, 2004. "Quarterly real GDP estimates for China and ASEAN4 with a forecast evaluation," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 23(6), pages 431-447.
    13. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
    14. Harris, David, 1997. "Principal Components Analysis of Cointegrated Time Series," Econometric Theory, Cambridge University Press, vol. 13(4), pages 529-557, February.
    15. Premachandra Athukorala & James Riedel, 1991. "The small country assumption: A reassessment with evidence from Korea," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(1), pages 138-151, March.
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    Cited by:

    1. Soon-Beng Chew & Jia Hong Chen & Ming Chou Hung & Teresa Wan Ying Lek, 2018. "Factors Affecting Export Competitiveness of Singapore’s Manufacturing Sector: A Regression Analysis," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-11, June.

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    More about this item

    Keywords

    price taker; demand constraint; export function; import content; restricted cointegrating space;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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