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Abstract
Even after seven decades of development experience and research, the debate on the appropriate industrialisation strategy for developing countries is far from settled. The notion of the middle-income trap (MIT) has brought into sharp relief the issue of how to transition beyond the factor accumulation phase of growth into a self-sustained productivity driven phase of growth, or as Krugman (1994) puts it 'transition from perspiration to inspiration’. A key area of contention in this respect is concerned with the role of multinational enterprises (MNEs) in the process of export-oriented industrialisation (EOI). Critics of the MNE-led industrialisation strategy argue that it is bound to runout of steam beyond the middle-income phase of development. They contend that because of the technological secrecy, monopolistic and oligopolistic practices germane to global operations of MNEs, it limits the scope for developing countries to transition into a self-sustained productivity-driven phase of industrialisation (Doner and Schneider, 2016).
The existing body of literature on the MIT so far has paid little attention to broadening our understanding of the underlying dynamics of the process of MNE-led industrialisation and the related policy options for transitioning into a productivity driven phase industrialisation. This thesis aims to fill this gap in the literature, through an in-depth analytical narrative of the Singaporean MNEled EOI experience. Singapore is an appropriate case study of the subject at hand: following separation from Malaysia in 1965, Singapore pioneered the MNE-led EOI strategy which was later closely emulated by several successful developing countries in East and Southeast Asia.
The thesis begins with an interpretative survey of the theoretical and empirical literature on the development thinking in the post war era, to provide the context for the Singaporean case study. The next chapter revisits the middle-income trap paradigm to understand the determinants of growth at and beyond middle income stage of development. The fourth chapter documents and elucidates the evolution of Singapore’s MNE-led industrialisation strategy, with emphasis on policies relating to structural transformation and industrial upgrading. The next four chapters form the analytical core of the thesis. The empirical analysis in these chapters makes use of industry level data compiled from unpublished and published returns of the Census of Manufacturing Activities of the Economic Development Board of Singapore.
Chapter 5 examines structural changes in the economy following the embrace of the EOI strategy with emphasis on manufacturing performance and industrial upgrading. Chapter 6 examines the role of MNEs in Singapore’s EOI experience. Chapter 7 probes the trends and patterns of manufacturing export and the role of MNEs in linking Singaporean manufacturing to Global Production Networks. Chapter 8 examines productivity growth within the MNE-led industrialisation framework. The final chapter summarizes the key findings and draws policy inferences.
