The Impact of R&D on the Singapore Economy:An Empirical Evaluation

Yuen Ping Ho (), Poh Wong () and Mun Heng Toh
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Mun Heng Toh: School of Business, National University of Singapore

Macroeconomics from University Library of Munich, Germany

Abstract: Much of the literature on the impact of R&D on economic performance is founded on the advanced countries, where the intensity of R&D expenditure has been relatively high and stable for many years. In this paper, we provide empirical estimates of the impact of R&D on the economic growth of a Newly Industrialised Economy, Singapore, where R&D expenditure intensity has been low initially, bur rising rapidly in recent years. The Cobb-Douglas based analysis provided empirical evidence that R&D investment in Singapore had a significant impact on its total factor productivity performance in the last 20 years and established a long-term equilibrium relationship between R&D investments and TFP. However, compared to the OECD nations, the impact of R&D investment on economic growth in Singapore is not as strong, as evidenced by lower estimated elasticity values. The long run elasticity of output with respect to R&D was computed to be 8.1% for Singapore compared to long run elasticities of over 10% estimated by other researchers for OECD countries. This suggests that Singapore still has some way to go in catching up with the advanced nations in terms of R&D productivity. This not only means increasing the level of R&D intensity in Singapore but also more efficient exploitation of domestic R&D activity.

Keywords: Economic Growth; R&D Expenditure; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: O30 O40 O53 (search for similar items in EconPapers)
Date: 2005-08-03
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: THE IMPACT OF R&D ON THE SINGAPORE ECONOMY: AN EMPIRICAL EVALUATION (2009)
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