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Singapore's Productivity Puzzle: Estimating Singapore's Total Factor Productivity Growth Using the Dual Method

Singapore's Productivity Puzzle: Estimating Singapore's Total Factor Productivity Growth Using the Dual Method

SINGAPORE’S PRODUCTIVITY PUZZLE: ESTIMATING SINGAPORE’S TOTAL FACTOR PRODUCTIVITY GROWTH USING THE DUAL METHOD

Conventional estimates of Singapore’s total factor productivity (TFP) growth point to a “productivity puzzle”. TFP growth in Singapore has been low throughout the past decades, despite an improving education profile for the population, increasing investments in research and development (R&D) and rising capital inflows. Moreover, this phenomenon appears unique to Singapore. Estimates of TFP growth in Hong Kong, another small open economy, are significantly higher.

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