Analysing industrial growth in various cities in KwaZulu-Natal, South Africa

Abstract

This article investigates the industrial success of various cities in KwaZulu-Natal, South Africa. It assesses the hypothesis that knowledge spillovers are supportive of industrial growth at the city level. Theories of economic city growth suggest that cities are engines of knowledge spillovers, which are essential to generate growth. This study utilised data on the growth of industries in cities in KwaZulu-Natal between 1996 and 2015. The study initially found that industries develop better in environments characterised by less concentration and more city diversity, which gave evidence of Jacobs’ externalities. However, after controlling for industry-specific and city-specific characteristics, the results changed significantly. No evidence was found for concentration effects (Marshall/Arrow/Romer-externalities) and less diversity supports city-industry growth (evidence against Jacobs’ externalities).

The global value chain dimension of foreign direct investment flows in the agro-industrial sector of South Africa, 2003–2014

“…In the mining and mineral industries in South Africa, for example, beneficiation involves the transformation of a primary product into a higher value product, which also has higher export sales values (DMR 2011). Beneficiation (adding value to the raw product), in today's global economy, can occur at any location in the world (Coetzee & Kleynhans, 2018).…”

Investigating city economic convergence in KwaZulu‐Natal, South Africa: Integration or isolation

“…When initial income levels are low and the rates of growth are not in synchronization, a cross‐section of economies may converge, especially where the under‐developed regions enjoy faster economic growth rates (Barro, ; Barro & Sala‐i‐Martin, , ; Coetzee et al, ). This means that poor regions develop faster than regions that are already better developed and catch up is possible in the long term.…”

“…It is a concept applied to describe how different aspects between city economies are integrated and is a process whereby regions cooperate and integrate with one another to reduce or eliminate barriers to the flow of products. As economic integration increases, the barriers of trade between markets diminish (Coetzee & Kleynhans, ). This, according to theory, should lead to lower prices for distributors and consumers, support innovation, and create economies of scale (see for example Bagella, Becchett, & Hasan, ; Kritzinger van Niekerk, ).…”