The political economy of transnational corporations: a study of the regionalization of Singaporean firms

This paper is concerned with the role of the state in promoting the cross-border operations of business firms from Singapore. It argues that the regionalization of Singaporean firms is essentially a state-led phenomenon because of two countervailing forces: (1) the heavy involvement of the state in the domestic economy; and (2) the relative lack of private entrepreneurship in Singapore. The paper begins with a theoretical review of the role of the state in the political economy of international business. A collusion-and-rivalry framework is established to analyze the case of Singapore. This is then followed by a brief analysis of the trends and patterns of outward foreign direct investment (FDI) and transnational corporations (TNCs) from Singapore over the past two decades. The penultimate section examines the nature and extent in which the 'entrepreneurial state' in Singapore has directly and indirectly involved in the regionalization of Singaporean TNCs. Three key issues emerge for detail analysis: (1) the historical underdevelopment of indigenous entrepreneurship; (2) the role of the state as entrepreneurs; and (3) the role of the state in changing the comparative advantage of regionalization through various incentive schemes. Some implications for theoretical development in international business studies and policy making in Singapore are offered in the concluding section. (C) 1998 Elsevier Science Ltd. All rights reserved.