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Article
Publication date: 2 August 2011

Koi Nyen Wong and Tuck Cheong Tang

This paper aims to examine both the cointegrating and causal relationships among inward FDI and the host country's employment in manufacturing and services sectors.

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Abstract

Purpose

This paper aims to examine both the cointegrating and causal relationships among inward FDI and the host country's employment in manufacturing and services sectors.

Design/methodology/approach

This paper applies autoregressive distributed lag (ARDL) framework to test the cointegration and causality patterns using Singapore as a case.

Findings

Apart from the presence of a unique long‐run relationship, the findings also show evidence of long‐run causality, running from employment in manufacturing and services to FDI inflows, and from FDI inflows and services employment to manufacturing employment. Furthermore, there is evidence of short‐run causality showing strong FDI‐employment and employment linkages, predominantly from the manufacturing to services.

Research limitations/implications

One likely area of future research is to extend this paper by using disaggregated data, e.g. FDI inflows by sector (manufacturing and services), and employment by the respective sectors.

Practical implications

Manufacturing and services have been regarded as the “twin engines” of growth for the Singapore economy. As the economy is moving up the value chain from downstream to upstream activities, a significant proportion of foreign direct investment (FDI) has been attracted to the manufacturing and services sectors. The present study provides useful policy implications towards promoting foreign investment in emerging areas of and manpower development in both sectors of the economy.

Originality/value

This paper explores the possible interactions between FDI inflows and employment in manufacturing and services sectors as well as the employment linkages between manufacturing and services in Singapore.

Details

Journal of Economic Studies, vol. 38 no. 3
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 16 May 2008

Koi Nyen Wong and Tuck Cheong Tang

This paper aims to examine the influence of exchange rate variability on the demand for Malaysia's top five electrical exports as classified by Standard International…

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4846

Abstract

Purpose

This paper aims to examine the influence of exchange rate variability on the demand for Malaysia's top five electrical exports as classified by Standard International Trade Classification (SITC) product groups.

Design/methodology/approach

The autoregressive distributed lag (ARDL) modelling approach to co‐integration is employed in order to estimate the influence of exchange rate variability on export demand.

Findings

The empirical results indicate that foreign income and prices are important determinants of export demand for all of the five electrical exports, in both the long run and the short run, over the sample period 1990‐2001. More interestingly, this paper supports the view that exchange rate variability has an adverse effect on Malaysia's electrical exports.

Research limitations/implications

One limitation of the study is the appropriateness of the ARDL modelling approach to examine the influence of exchange rate variability (which is stationary, I(0)) on trade behaviour such as export demand behaviour.

Practical implications

This paper is important to policymakers for the design of both exchange rate and trade policies in order to promote export growth, which could lead to Malaysia's transition towards high‐technology industrialisation.

Originality/value

This paper examines the influence of exchange rate variability on the demand for Malaysia's top five electrical exports as classified by SITC product groups, information which is not available in the existing literature.

Details

Journal of Economic Studies, vol. 35 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

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