(A) comparative approach of the global competitiveness of Singapore, Malaysia, Mauritius and Madagascar

Abstract

The research aims to identify determinants of foreign direct investment in four island economies of Singapore, Malaysia, Mauritius and Madagascar over the period of 2009-2013. In particular, it seeks to isolate the most significant factors to increase the attractiveness for a more diverse array of investment where resource-intensive investments still prevail. The research uses the Generalized Double Diamond inspired by Moons framework aiming to assess both national and international competitiveness. The methodology includes four controllable sets of factors divided into twenty sub-factors for the domestic diamond and into seven sub-factors for the international diamond that influence decisions for investment in one or another country. Key findings suggest that for Singapore, foreign direct investment positively responds to the quality of governance and the development of a supportive industry infrastructure. Governance and related industries are determinants of both national and international competitiveness for Singapore and to a lesser extent for Mauritius. However, the quality of governance is not relevant as a determinant for attractiveness in resource-rich country like Madagascar on both national and international attractiveness, and to a lesser extent for Malaysia in terms of national attractiveness. Furthermore, the research finds that better demand conditions in Singapore, Mauritius and Malaysia improve international attractiveness of the host economy. However, there are limitations to the research. The findings do not assess in a precise quantitative manner the correlation between better regulatory quality, industry infrastructure, and the level of investment a particular sector attracts.