The paper examines the influence of FDI on manufacturing growth of Singapore in a panel data sample of 14 manufacturing industries over 30 years stretching from 1975 to 2004. By controlling for unobserved industry characteristics and time effects, we find a positive contemporaneous effect of FDI on the output growth of Singapore manufacturing industries where 1 percent increase in FDI tends to increase manufacturing output growth by nearly 0.4 percent. We also observed positive impact of FDI on manufacturing output growth using Arellano-Bond GMM estimator that controls for the endogeneity problems in the estimation.
Singapore economy is an open economy that relies heavily on foreign investment to maintain its competitiveness and drive its economic growth. FDI in export-oriented industries, particularly the electronics industry, has been the key factor in driving the exportled growth in the Singapore economy. Although there are several studies highlighting the importance of FDI on the Singapore economy, most of them are focused on the impact at the aggregate economy and there is lack of empirical studies to study the impact of FDI at the manufacturing sector at a disaggregated level (Hu, 2004; Chang, 2005; Anwar, 2008; Low, 1999). This paper intends to fill this gap by examining the impact of FDI flows on the growth of the Singapore economy at the disaggregated manufacturing industry level. To our knowledge, this is the first paper to examine the impact of FDI on manufacturing output growth using a disaggregated industrial level data.
Do divisions or business units in large conglomerates with better investment opportunities receive larger capital expenditure budgets and thus invest more? Or is it possible that they receive higher budgets simply because they are run by more powerful and not necessarily better managers? This is the question we tackle in this paper empirically. Common sense suggests that managers who are powerful inside organizations are more successful in pursuing their personal goals and in receiving larger allocations of capital for their own units. This idea has also been formalized in models by Meyer, Milgrom and Roberts (1992), Scharfstein and Stein (2000), Rajan, Servaes and Zingales (2000) or Wulf (2008). These models assume that Division CEOs inside firms have a preference for larger capital allocations (for rent-seeking/empire building reasons) and therefore conduct activities to get more funds allocated (so-called influence activities). These influence activities cause costs because of the resources spent on affecting allocations and because of the resulting suboptimal investment decisions. In general, these internal capital market models predict that managers with more bargaining power vis-a-vis the CEO of the firm are more likely to get larger capital allocations.
We argue that the situation in the empirical literature on internal capital markets is similar to the one on internal labor markets where Baker and Holmstrom (1995) argued that there are “too many theories, too few facts” and “we need ... additional studies of personnel records, supplemented by interviews and institutional facts.” Following their argumentation, Baker, Gibbs and Holmstrom (1994a, 1994b) tested theories based on detailed internal labor market data from a single firm. Motivated by this approach, we study what happens in the internal capital market of a large international conglomerate that operates worldwide and is headquartered in Europe. More specifically, we look at the effects of bargaining power on the allocation of capital for investment (capital expenditure). We use a proprietary, very rich and detailed data set on realized and planned capital allocations. The data set is based on internal management accounting data and allows us to precisely look inside the conglomerate to test our predictions. Our data contains detailed information on all five divisions of the firm as well as on all 22 business units. The business units operate under the roof of the divisions which have no operating activities themselves. We have monthly realized (actual) allocation data for the period 01/2001-12/2006 and quarterly planned allocation data for the period 01/2002-12/2006.
The Codex Committee on Pesticide Residues (CCPR) is a subsidiary body of the Codex Alimentarius Commission (CAC) that advises on all matters related to pesticide residues. Its primary objective is to develop Maximum Residue Limits (MRLs), in order to protect the health of the consumer while facilitating international trade. Public health considerations are taken into account by establishing the MRLs at levels not higher than those resulting from use of the pesticide in accordance with Good Agricultural Practices (GAP). However, explicit consideration of possible exposure to residues of a pesticide is an integral part of the risk assessment process to ensure that the Acceptable Daily Intake (ADI) of the pesticide is not exceeded. The best assurance that exposure to residues are within safe limits is obtained from dietary intake studies which can provide detailed food consumption data and accurate and reliable pesticide residue data. When such studies are not feasible or the pesticide is not yet being used or has only recently been approved for use, pesticide residue intake must be predicted on the basis of the available data.
In 1989, guidelines for predicting dietary intake of pesticide residues were prepared by the Global Environment Monitoring System Food Contamination Monitoring and Assessment Programme (GEMS/Food) in collaboration with the CCPR (WHO, 1989). Based on these guidelines, GEMS/Food routinely provided international dietary exposure assessment calculations for pesticides considered by the Joint FAO/WHO Meeting on Pesticide Residues (JMPR) and the CCPR. The guidelines were effective in resolving concerns for dietary intake for most pesticides; however, exposure assessments for a number of pesticides indicated that more accurate methods for estimating intake of pesticide residues were required. On the request of the CCPR and consistent with a recommendation of the FAO/WHO expert consultation on risk analysis (FAO/WHO, 1995a), a joint FAO/WHO consultation was convened 2-6 May 1995 in York, United Kingdom to revise the 1989 guidelines. Based on the report of this consultation (FAO/WHO, 1995b), the present revised guidelines have been prepared by GEMS/Food.
