The South African manufacturing exporter story

Abstract

Existing South African work on firm-level data has been limited by access to large datasets that track firms over time. This paper overcomes this by analysing a new dataset of the population of manufacturing firms that are matched to their export transactions. South African firm-level exporting is similar to the stylized facts of firm-level exporting found internationally. Moreover, heterogeneity that exists within exporting is evident. Not only do exporters differ in terms of the amount exported, but also in terms of the number of products and destinations they export too. These in turn are related to firm-level characteristics including productivity.

New Data, New Approaches and New Evidence: A Policy Synthesis

“…Export destination also matters with high productivity firms capable of entering markets in high income countries and exporting multiple products to multiple destinations. All of these observations are very consistent with international evidence (Edwards et al ., ; Kreuser and Newman, ; Matthee et al ., ).…”

“…While these observations hold for firms that are exporters or importers only, the results are particularly striking for firms that both engage in exports and directly purchase imported intermediates. Similar results hold for export destinations and products: firms that export to developed countries and/or to multiple destinations and/or multiple products tend to exhibit higher levels of productivity (Matthee et al ., ).…”

Labour demand and the distribution of wages in South African manufacturing exporters

“…New studies, however, are emerging using administrative data on the population of firms in South Africa. The studies on international trade by Edwards et al (2016) and Matthee et al (2016) provide insight into the dynamics of exporter (and importer) behaviour over time. Stylized facts on manufacturing firms that have emerged from this body of work is that exporters are rare, are larger (in terms of number of employees), pay better, and are more productive than non-exporters (Matthee et al 2016).…”

“…Literature related to this paper is, however, still limited. Apart from the stylized facts mentioned above, Matthee et al (2016) also investigate exporter heterogeneity in terms of wages and number of employees. Similarly to international evidence, they find that multi-destination and multiproduct exporters have more employees and pay higher wages than their single-destination and single-product counterparts.…”

“…One example is Rankin and Schöer (2013) which uses the World Bank's Investment Climate Assessment Survey conducted in 2004 to investigate how labour demand and wages differ by export destination. More recently (although not having a specific labour focus), Matthee et al (2016) and Edwards et al (2016) use South African Revenue Service (SARS) administrative data and illustrate the complexity within the behaviour of South African manufacturing exporters. Exporter heterogeneity in terms of whether they are two-way traders, the number of products they export, the number of destinations exported to, and the type of destinations exported to all contribute to different levels of labour demand and wages.…”