Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/169364
Title: SINGAPORE MULTINATIONALS - AN ANALYSIS OF OVERSEAS INVESTMENT : TRENDS AND MOTIVES
Authors: CHIANG CHIEW PENG
Issue Date: 1992
Citation: CHIANG CHIEW PENG (1992). SINGAPORE MULTINATIONALS - AN ANALYSIS OF OVERSEAS INVESTMENT : TRENDS AND MOTIVES. ScholarBank@NUS Repository.
Abstract: Despite much talk about nurturing local-owned Singapore firms into world-class players in the intemational business arena, little has been studied about the recent trends of overseas investment by Singapore firms the factors that motivate them to venture abroad and the nature of their current overseas investment. This study was undertaken for the purpose of gaining more insight into these aspects. Government statistical data were used to provide background information on the broad patterns of Singapore's overseas investment. However, these official data do not provide information on the motives for investing abroad. To overcome this data inadequacy, information from annual reports and published reports in the press and business magazines were extracted. Altogether, 32 Singapore multinationals and 62 of their overseas investment were identified. This was further supplemented by a questionnaire survey conducted with 5 firms. A conceptual framework was developed to categorize the various motives identified in earlier literature works on Singapore multinationals. The framework incorporates both the home push factors and host pull factors dimension as well as strategic dimension. Based on official data available, the overseas investment of Singapore multinationals from 1981 to 1989 was found to be rising but composing mainly of transactions with their foreign operations rather than direct investment. Majority local-owned Singapore multinationals were more active in investing abroad than the wholly local-owned ones. Singapore's overseas investment has always been focused in the Asian region, especially Malaysia. However, there was a recent shift in emphasis from ASEAN countries to East Asian countries. The average size of direct investment in developed areas was relatively larger than that in developing countries and the income contribution of these ventures to Singapore's Gross National Product was negligible. The analysis on the 32 Singapore multinationals in the manufacturing sector showed that they tend to invest in manufacturing ventures abroad. They seem to set up new companies only in developing countries and invest in developed areas via acquisition of existing firms. Besides expanding/opening up new markets, raw materials/labour-related factors and technology-related reason is were the most important motivations to invest abroad. While home or host-country related factors affected both overseas investment in developing and developed countries alike, there were substantial differences in the motives behi1ul overseas ventures in the two groups of countries. Like Hong Kong and South Korea, Singapore's overseas investment is more an upshot of the country's economic growth.
URI: https://scholarbank.nus.edu.sg/handle/10635/169364
Appears in Collections:Bachelor's Theses

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