GLOBAL STRATEGIES OF TRANSNATIONAL CHEMICAL FIRMS : A CASE STUDY OF THE SINGAPORE CHEMICAL CLUSTER

Abstract

Strong performance demonstrated by Singapore's chemical industry in recent years has indeed increased public awareness about the importance of this obscure sector in the Singapore economy. Much of this robust growth is attributed to the ingenious policies implemented by the government. Nevertheless, the ultimate decision to build a multi-billion chemical processing plant in resource-scarced Singapore still lies very much in the hands of foreign chemical companies. This thesis proposes a paradigm shift through which a firm-level perspective is adopted in understanding the development of Singapore's chemical industry. It is argued that, global strategies of transnational chemical firms have a vital role to play in promoting growth within the Singapore chemical industry cluster. Conceived under the 1991 Strategic Economic Plan, the idea of clustering represents a radically different approach in developing the petroleum refining, petrochemicals, specialty chemicals and pharmaceutical industries where previously each was deemed a separate activity. This study uses the multi-strategy approach as the overall research framework. This is to overcome the fallibility of over-depending on any single method. Following that, the case study approach is employed as the analytical strategy to examine the underlying context (i.e., rising global competition) and processes (i.e., implications of clusters on transnational chemical firms) involved in shaping the development of the Singapore chemical industry cluster. Based on a field research conducted with subsidiaries of transnational chemical firms in Singapore, this thesis highlights the importance of contextual influence on the global strategies of CTNCs. Two major conditions are identified namely, rising global competition and the huge market potential offered by developing economies. Given these circumstances, transnational chemical firms have depended on their established capabilities to formulate strategies for global competitiveness. In Singapore, subsidiaries of transnational chemical firms have tapped into cluster-based advantages to enhance their capabilities, thereby contributing to the further growth of the country's chemical cluster. Finally, in light of the research findings, some implications concerning the challenges and policy options facing the Singapore chemical industry are offered.