Can the Knowledge-Capital Model Explain Sectoral Foreign Investment? Evidence from Singapore


Gnanaraj Chellaraj and Aaditya Mattoo

East-West Center Working Papers, Economics Series, No. 101


Honolulu: East-West Center

Publication Date: March 2009
Binding: paper
Pages: 38
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Using the knowledge-capital model, we compare factors affecting the inbound and outbound manufacturing and services investment between Singapore and a sample of industrialized and developing countries. The nature of Singapore's two-way investment with the industrialized nations is essentially skill seeking, while with the developing countries it is low wage seeking with the exception of inbound services investment, which is skill seeking. During 1994-2003 time period, Singapore's skill abundance relative to all parent countries, increased annual average inbound investment in manufacturing and services by US$ 8.15 billion and US$ 15.19 billion respectively.






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