Assessing the Role of FDI Inflows and Money Supply in Driving Manufacturing Success: A Case of Singapore
DOI:
https://doi.org/10.61506/01.00438Keywords:
FDI Inflows; Monetary Policy, Manufacturing Value Added, ARDL, SingaporeAbstract
The manufacturing value added is an important macroeconomic indicator that drives economic activities through supply chain, exports, employment opportunities, public revenue and living standards. This research paper aims to identify the major macroeconomic factors that determine manufacturing value added in Singapore. The study applies ARDL method over annual ranging from 1981 to 2022. The results indicates long run cointegrating relation between manufacturing value added and its determinants, while money supply acts as a tool of monetary policy and foreign direct investment to boost manufacturing value added. The results obtained further indicates that although in the short run imports might increase manufacturing value added, but over time they reduce it instead. The study therefore recommends expansionary monetary policy may be promoted to boost manufacturing value added while actively encouraging FDI inflows so that domestic manufacturing can be stimulated.
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