No abstract

PurposeInnovation is regarded as a crucial determinant of growth and development in South Africa, and small, medium and micro enterprises (SMMEs) have been earmarked as instruments for the achievement of the socio-economic goals and innovation as set out in the National Development Plan. The purpose of this study is to investigate the effect of innovation on SMME performance in South Africa.Design/methodology/approachThe empirical analysis was conducted using the quantile regression technique to examine the effect of innovation on the performance of firms at different sales levels. Data from the World Bank's enterprise survey was used for the analysis.FindingsThe results of the empirical analysis showed that R & D expenditures have a positive and significant effect on performance for firms with higher sales (high growth or larger firms). There is evidence that the introduction of new products/services promotes performance for low growth/ smaller firms.Practical implicationsThe empirical results imply that innovation is crucial for SMMEs’ development and growth. However, smaller/low growth firms are not able to spend on R & D due to a lack of funds which could be the reason for their low survival rate. More support needs to be provided to smaller firms with lower sales growth, given the large financial outlay required for R & D expenditures. Despite the lack of funding for R & D expenditure, smaller firms are encouraged to introduce new products and methods of production that do not require major financial outlays.Originality/valueThere is scant empirical evidence on the impact of innovation on firm performance in South Africa. Most studies investigate the challenges faced by SMMEs and the different types of innovation approaches used by firms. Furthermore, the study employs the quantile regression approach which highlights the effect of innovation on firms of different sizes.

Purpose The purpose of this study is to investigate the effect of foreign direct divestments (FDD) on economic growth and development in South Africa for the period 1991–2019. Design/methodology/approach The non-linear autoregressive distributed lag technique is used for the empirical analysis. Two regression models are specified, one for economic growth and the other for development which is proxied by poverty. Findings The empirical results suggest that foreign divestments are detrimental to both economic growth and development. Furthermore, the results suggest that the negative effects of foreign divestments outweigh the positive effects of FDI inflows. Practical implications South African policymakers should thus use policies that promote the retention of FDI inflows together with those that attract inflows. Furthermore, policies that promote economic freedom such as transparency and reduction in the time frame for granting government permits for business operations are also of paramount importance. Originality/value Most of the available literature on FDD focuses on the firm perspective. Available studies on the effect of FDD on economic growth do not investigate the effect of divestment on economic development. Economic growth is a necessary but not a sufficient condition for the achievement of socioeconomic development.

The paper evaluates strategies for developing successful special economic zones and transnational zones for Southern African countries to spur growth and employment. Most special economic zones implemented in Southern Africa have largely failed to bring adequate growth and employment due to numerous constraints. Globally, selected countries have successfully implemented export-oriented industries through such spatial industrial policy. We review case studies across the world by comparing different regions on selected indicators related to the best-practice framework developed through this study. The framework represents the five key components of successful special enterprise zones, namely: institutional arrangements; running (operational) framework; expansion framework; attaining/achieving framework; and reflection/review mechanisms. We identify best practice and review the implications for implementation and sustainability strategy in Southern Africa. The main findings point to unique lessons from international best practice on the establishment and operational strategy for zones and opportunities for transnational zones.

The study explored the impact of maritime transport financing on trade in South Africa. Using the Autoregressive Distribution lag model, we examine the impact of maritime transport financing on total trade in South Africa during the period 1994 to 2019. The results confirm a long and short-run positive relationship between maritime transport financing and total trade. The findings suggest an overall, substantial investment in maritime transport has the potential to promote trade flows in South Africa. We recommend more investments towards maritime transport infrastructure to ensure a significant increase in exports, and to stimulate economic development in South Africa.