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This paper uses shift-share methodology to analyse the competitiveness of Singapore's electronics exports to the United States. The findings are that, although Singapore's overall competitiveness in electronics improved between 1992 and 1998, it has fallen behind its regional rivals-Malaysia, the Philippines and China. Given the heavy dependence of the Singapore economy on the electronics industry, this has serious implications for its future growth.
INTRODUCTION
In the past three decades, Singapore has pursued an export-led industrialization policy to the extent that external demand has consistently contributed around two-thirds to the city-state's economic growth. Consequently, Singapore's exports, the value of which was ranked the world's thirteenth largest by the World Trade Organization in 1997, account for nearly 1.9 times the country's nominal Gross Domestic Product (GDP). While re-exports and oil exports comprise about 50% of total exports, non-oil domestic exports (NODEs) make up the other half. Within NODEs, electronics, which collectively constitute two-thirds of total NODEs, are Singapore's most important export item. More significantly, Singapore accounts for about half of the global supply of disk drives, as most of the world's major disk drive manufacturers have set up their production base in the city-state. Given Singapore's high dependence on electronics exports, which unfortunately have been plagued with excess capacity and weak external demand in the recent past, the performance of this industry in the near future is likely to dictate the overall pace of Singapore's economic recovery.
Against this background, the present paper will first highlight the importance of Singapore's electronics industry to the economy. Second, as the United States (US) remains the largest market for Asian exporters, and given the high similarity of electronics exports between Singapore and other Asian economies (see Table 1, p. 98), an attempt will be made to compare the competitive position of Singapore's top three components of electronics exports to the US with those of other Asian rivals (China, Hong Kong, Malaysia, the Philippines, South Korea, Taiwan and Thailand) between 1992 and 1998, using the methodology of shift-share analysis. Third, the authors will assess the implications of the latter analysis for Singapore's electronics industry in the years ahead.
DOMINANCE OF THE ELECTRONICS SEGMENT
During 1990-97, investments in electronics, which made up about 38% of total manufacturing investments in Singapore,...