Measuring the export capability of South African regions

Abstract

Recent research has identified what determines local exports and what policies might make them grow. Regions with higher Gross Domestic Product per capita, faster population growth, higher levels of skills, greater export diversification and shorter distances to ports have experienced faster export growth. However, the results of regression models apply to a theoretical representative region and do not allow one to establish where policy interventions will be most effective. This article constructs an index to identify the regions in South Africa that can export manufactured goods. It draws on the literature of the determinants of exports for indicators of the capability (or potential) to export across 354 magisterial districts in 1996 and 2001. The results show a positive relationship between export capability and export performance. The article identifies a number of front-runner magisterial districts along with those of high capability but low performance that stand to benefit most from industrial policy interventions.Export capability, export performance, subnational regions, South Africa,

The Location of Manufacturing Exporters in Africa: Empirical Evidence

“…The theory of new economic geography attempts to fill this gap by describing the formation of economic agglomeration in geographical space (Fujita and Krugman, 2004). It takes the spatial location of exports into consideration (Krugell and Matthee, 2009). The rationale behind regional economic imparity is that agglomeration creates growth and certain regions experience forces that encourage agglomeration and others experience forces that achieve the opposite (Armstrong and Taylor, 2000; Fujita and Krugman, 2004).…”

Untitled

“…The authors have used Balassa (1965) revealed comparative advantage to measure comparative advantage for selected products in Angola. The technique has been used by Krugell and Matthee (2009) to measure export capabilities of the Southern African internal regions.…”

An Analysis of Inter-Sectoral Comparative Advantage of Seychelles

“…RCA is the frequently adopted method because it is not founded on limited assumptions which cannot hold empirically (Mutambatsere, 2007). Krugell and Matthee (2009) used the Balassa (1965) method in comparing the strength of South African regions.…”