Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore

In this paper, we take another approach to accounting for the sources of Singapore’s economic growth by being explicit about the channels through which Singapore, as a technological follower, benefits from international R&D spillovers. Taking into account the channels through which technology de...

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Main Authors: HO, Kong Weng, HOON, Hian Teck
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2006
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Online Access:https://ink.library.smu.edu.sg/soe_research/899
https://ink.library.smu.edu.sg/context/soe_research/article/1898/viewcontent/growth.pdf
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spelling sg-smu-ink.soe_research-18982019-05-01T09:25:35Z Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore HO, Kong Weng HOON, Hian Teck In this paper, we take another approach to accounting for the sources of Singapore’s economic growth by being explicit about the channels through which Singapore, as a technological follower, benefits from international R&D spillovers. Taking into account the channels through which technology developed in the G5 countries diffuses to technological followers, we show that 57.5 percent of Singapore’s real GDP per worker growth rate over the 1970-2002 period is due to multifactor productivity growth. In particular, about 52 percent of the growth is accounted for by an increase in the effectiveness of accessing ideas developed by the technology leaders through improvement in our educational quality and increase in machinery imports and foreign direct investment from the G5 countries. We also find that capital accumulation that takes the form of imports of machinery as well as foreign direct investment from the G5 countries enhances the effectiveness of technology transfer thus raising the rate of return to capital. Compared to the rate of return to capital inferred from the traditional Solow growth model with purely exogenous technological progress of 10.8 percent, taking into account the technology transfer channel raises the implied rate of return to 13 percent 2006-06-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/899 https://ink.library.smu.edu.sg/context/soe_research/article/1898/viewcontent/growth.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University Asian Studies Finance Macroeconomics
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Asian Studies
Finance
Macroeconomics
spellingShingle Asian Studies
Finance
Macroeconomics
HO, Kong Weng
HOON, Hian Teck
Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore
description In this paper, we take another approach to accounting for the sources of Singapore’s economic growth by being explicit about the channels through which Singapore, as a technological follower, benefits from international R&D spillovers. Taking into account the channels through which technology developed in the G5 countries diffuses to technological followers, we show that 57.5 percent of Singapore’s real GDP per worker growth rate over the 1970-2002 period is due to multifactor productivity growth. In particular, about 52 percent of the growth is accounted for by an increase in the effectiveness of accessing ideas developed by the technology leaders through improvement in our educational quality and increase in machinery imports and foreign direct investment from the G5 countries. We also find that capital accumulation that takes the form of imports of machinery as well as foreign direct investment from the G5 countries enhances the effectiveness of technology transfer thus raising the rate of return to capital. Compared to the rate of return to capital inferred from the traditional Solow growth model with purely exogenous technological progress of 10.8 percent, taking into account the technology transfer channel raises the implied rate of return to 13 percent
format text
author HO, Kong Weng
HOON, Hian Teck
author_facet HO, Kong Weng
HOON, Hian Teck
author_sort HO, Kong Weng
title Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore
title_short Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore
title_full Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore
title_fullStr Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore
title_full_unstemmed Growth Accounting for a Follower-Economy in a World of Ideas: The Example of Singapore
title_sort growth accounting for a follower-economy in a world of ideas: the example of singapore
publisher Institutional Knowledge at Singapore Management University
publishDate 2006
url https://ink.library.smu.edu.sg/soe_research/899
https://ink.library.smu.edu.sg/context/soe_research/article/1898/viewcontent/growth.pdf
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