SINGAPORE'S EXPORT COMPETITIVENESS COMPARED TO OTHER DYNAMIC ASIAN ECONOMIES : A SHIFT-SHARE ANALYSIS

Abstract

Export-oriented industrialisation has been one of the main sources of growth. The continued growth of Singapore depends on the performance of her exports in the international markets. The main objective of this thesis is to study the international competitiveness of Singapore's manufactured exports relative to the DAEs. The DAEs are perceived to be Singapore's closest competitors for their rapid export-oriented growth andincreasingly similar export patterns.Exchange rate always comes into the picture in most of the discussion of export competitivness. A strong Singapore dollar keeps out imported inflation but inflates our export prices in the international markets at the same time. In Chapter 2, the debate on the effects of the exchange rate on Singapore's export competitiveness is reviewed. This chapter also summarizes the results of the shift-share analysis conducted by DBS from theperiod 1986 to 1990 so as to provide an idea of the performance of Singapore's exports so far and to provide a meaningful comparison with this study. Since the topic of export competitiveness is very wide, a theoretical framework is presented in Chapter 3 so as to understand the issue of competitiveness better. The different measures of competitiveness are also discussed. In Chapter 4, the competitiveness of Singapore's exports is investigated. The measure of competitiveness used is shift-share analysis. The competitiveness of Singaporeis evaluated based on the SITC 2-digit level data. The methodology and specifications of the study are set in this chapter.In Chapter 5, the results of the shift-share analysis shows that certain industries have lost out in their competitiveness positions. In Singapore, the electronics industry is broadly classified under office and data machines (SITC 75), telecommunications equipment(SITC 76) and electrical machinery (SITC77). SITC 76 and 77 have lost their competitiveness in both the US and the EU markets. Further analysis into the SITC 3-digit and 7-digit level data reveals that Singapore has lost her competitiveness in the relatively more labour intensive productions. The analysis also shows that Singapore is restructuring towards higher value-added and higher technology productions since she can no longer compete with the labour abundant neighbours in terms of costs, especially where labour costs are concerned.