Can South Africa sustain and diversify its exports?

Matthee, Marianne; Idsardi, Ernst; Krugell, Waldo

doi:10.17159/2222-3436/2016/v19n2a6

Cited by 3 publications

(4 citation statements)

References 7 publications

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“…Brenton, Saborowski et al (2010) suggest that firm entry rates into markets may be the same across different types of economies, but exit rates differ significantly. The results here are in line with export diversification from the extensive margin point of view (Matthee et al 2016), which is an increase in the number of trading partners (it can also be accompanied by an increase in the number of products exported) (Brenton and Newfarmer 2007;IMF 2014). South Africa needs to tap into the extensive sustainability margin to help with the structural transformation of the economy and the realization of export-led growth (Besedes and Prusa 2006), which is inclusive (Purfield et al 2014).…”

Section: Firm Survival In the Export Marketsupporting

confidence: 79%

“…This can be interpreted through the intensive export diversification argument. More productive exports are considered to reflect manufactured goods rather than raw natural resources (Matthee et al 2016). Market experience and expansion increase the chances of a firm's survival, and this is also supported by the literature (Inui et al 2017).…”

Section: Discrete Hazard Modelmentioning

confidence: 91%

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Firm and product survival analysis: Evidence from South African tax administrative and products data

Mishi¹,

Matekenya²,

Jeke³

et al. 2021

WIDER Working Paper

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provides economic analysis and policy advice with the aim of promoting sustainable and equitable development. The Institute began operations in 1985 in Helsinki, Finland, as the first research and training centre of the United Nations University. Today it is a unique blend of think tank, research institute, and UN agency-providing a range of services from policy advice to governments as well as freely available original research.The Institute is funded through income from an endowment fund with additional contributions to its work programme from Finland, Sweden, and the United Kingdom as well as earmarked contributions for specific projects from a variety of donors.

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Section: Firm Survival In the Export Marketsupporting

confidence: 79%

Section: Discrete Hazard Modelmentioning

confidence: 91%

Firm and product survival analysis: Evidence from South African tax administrative and products data

Mishi¹,

Matekenya²,

Jeke³

et al. 2021

WIDER Working Paper

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“…Secondly, while the composition of South Africa's exports is changing, there is insufficient diversification into new and higher value products. Indeed, Matthee, Idsardi and Krugell (2016) reveal that since 1994, the highest export growth has been in non-fuel primary commodities (38%), while medium-skill, technology-intensive manufactures have grown by 22%. Resource-intensive manufactures have shown a serious decline in exports (around 50%).…”

Section: Introductionmentioning

confidence: 99%

Identifying the determinants of South Africa’s extensive and intensive trade margins: A gravity model approach

Matthee¹,

Santana-Gallego

2017

SAJEMS

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Background: The significance of the paper is twofold. Firstly, it adds to the small but growing body of literature focusing on the decomposition of South Africa’s export growth. Secondly, it identifies the determinants of the intensive and extensive margins of South Africa’s exports – a topic that (as far as the authors are concerned) has not been explored before.Aim: This paper aims to investigate a wide range of market access determinants that affect South Africa’s export growth along the intensive and extensive margins.Setting: Export diversification has been identified as one of the critical pillars of South Africa’s much-hoped-for economic revival. Although recent years have seen the country’s export product mix evolving, there is still insufficient diversification into new markets with high value-added products. This is putting a damper on export performance as a whole and, in turn, hindering South Africa’s economic growth.Methods: A Heckman selection gravity model is applied using highly disaggregated data. The first stage of the process revealed the factors affecting the probability of South Africa exporting to a particular destination (extensive margin). The second stage, which modelled trade flows, revealed the variables that affect export volumes (intensive margin).Results: The results showed that South Africa’s export product mix is relatively varied, but the number of export markets is limited. In terms of the extensive margin (or the probability of exporting), economic variables such as the importing country’s GDP and population have a positive impact on firms’ decision to export. Other factors affecting the extensive margin are distance to the market (negative impact), cultural or language fit (positive impact), presence of a South African embassy abroad (positive impact), existing free trade agreement with Southern African Development Community (positive impact) and trade regulations and costs (negative impact). In terms of the intensive margin (or the factors influencing the volume of exports), there are strong parallels with the extensive margin, with the exception being that the time involved in exporting has more of an impact than documentary requirements.Conclusion: Among the factors contributing to South Africa’s exports having largely developed in the intensive margin are a general lack of market-related information, infrastructural weaknesses (both of a physical and technological nature) and a difficult regulatory environment – all of which add to the cost and time involved in exporting. Policymakers have long spoken about the need for the country to diversify its export basket, but now talk about needs to give way to action. The government and its economic partners need to arrive at a common vision of an export sector that will be able to expand into new products and markets, be an active participant in global value chains and deliver sustainable jobs.

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“…The authors have, therefore concluded that the manner in which export diversification is obtained might play a significant role in explaining its influence on per capita income. In contrast with Naudé et al 2011, Matthee et al (2016) have shown for South Africa that exporting goods that are distant from the country's comparative advantage does not result in higher economic growth.…”

Section: Export Product Diversification and Services Export Diversifimentioning

confidence: 78%

Export Diversification and Financial Openness

Sk¹

2020

Preprint

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This paper investigates empirically the effect of export diversification (i.e., both export product diversification and services export diversification) on financial openness, using a sample of 119 countries (including both developed and developing countries) over the period 1985-2014. Based on the Blundell and Bond's two-step system Generalized Methods of Moments, the analysis has revealed that both export product diversification and services export diversification influence positively financial openness. However, this outcome hides differentiated effects across countries in the full sample. Specially, countries with a very high real per capita income experience a positive effect of export concentration on financial openness, while for countries with a relatively lower per capita income, it is rather export diversification that drives positively financial openness. Interestingly, the effect of export diversification on financial openness depends on the size of external shocks that affect domestic economies, as well as countries' economic growth performance. Overall, these findings add to the empirical literature on the effect of international trade on financial openness by showing that both export product diversification and services export diversification matter for financial openness.

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Can South Africa sustain and diversify its exports?

Cited by 3 publications

References 7 publications

Firm and product survival analysis: Evidence from South African tax administrative and products data

Firm and product survival analysis: Evidence from South African tax administrative and products data

Identifying the determinants of South Africa’s extensive and intensive trade margins: A gravity model approach

Export Diversification and Financial Openness

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