Institutional support, technological capabilities and domestic linkages in the semiconductor industry in Singapore

Abstract

This article examines the relationships between host-site institutional support and firm-level technological upgrading, and between technological upgrading and domestic production linkages in the semiconductor industry in Singapore. An evolutionary perspective was used to measure technological capabilities using knowledge embodied in machinery, organization, processes and products. The results show that host-site institutional support is important for technological upgrading, and technological capabilities are positively correlated with domestic linkages. Also, domestic linkages rather than regional linkages were correlated with technological upgrading, which is a consequence of Singapore's sophisticated infrastructure compared to its neighbours in South-east Asia.

Keywords::

• domestic production linkages
• institutional support
• semiconductors
• Singapore
• technological capabilities

Acknowledgements

We wish to acknowledge financial support from Economic Research Institute for ASEAN and East Asia (ERIA) for supporting financially the survey reported in this article. We wish to also thank incisive comments from two referees.

Disclosure statement

The usual disclaimer applies.

Notes

^1. We only considered domestic exports excluding in the process re-exports.

^2. Interview by the authors with Johore state officials on 15 December 2012 in Johor Bharu.

^3. We obtained this evidence from a questionnaire administered to both semiconductor firms and their suppliers and purchasers in 2012.

^4. Econometric tests between regional linkages and technological capability were not significant.

^5. Interviews by authors in 2012.

Additional information

Notes on contributors

Rajah Rasiah

Rajah Rasiah is Professor of Economics and Technology Management at University of Malaya. He is currently on sabbatical at Harvard University.

Yap Xiao Shan

Yap Xiao Shan is completing her doctorate at University of Malaya. She shared the best PhD student paper prize at the 10th GLOBELICS conference in 2012 in Hangzhou.