The Impact of Financial Development, Net Foreign Assets and Domestic Businesses on Export Performance: A case of Singapore Economy

Abstract

The effects of financial sector liberalization; foreign assets, domestic businesses in the form of listed companies and domestic manufacturing, and real interest rate on export performance of Singapore economy are tested by using ARDL bounds testing approach by covering period from 1978-2023. The empirical results suggest that liberalizing financial sector and foreign assets significantly accelerate export performance. This study considers two proxies for domestic businesses – listed companies and manufacturing. The results uncover the significantly expansionary effects of both indicators of domestic businesses on export performance. Lastly, real interest rate is adversely affecting export performance in Singapore. This study suggests that by expanding domestic businesses; increasing investments in foreign assets, liberalizing financial sector and reducing real interest rate can give boost to exports in Singapore.