South African Exporters and the Global Crisis: Intensive Margin Shock, Extensive Margin Hangover

Abstract

This paper examines how changes at the intensive (established exporters exporting existing products to established markets) and the extensive (new exporters, products or markets) margins contribute to South African export growth and how this was affected by the global financial crisis. We find that the intensive margin is the more important contributor to export growth, contributing more than three quarters of observed growth. The intensive margin contracted significantly during the global financial crisis of 2009 but bounced back to pre-crisis levels quickly. However, the impacts on the extensive margin persisted after the crisis with lower levels of entry of firms, new products and new destinations. The short-term impact of the crisis was mitigated by the concentration of South African exports among larger, more productive super-exporters. However, the fall in entry of new firms, products and destinations as a result of the crisis may mean that this concentration persists, and, at least over the next few years, South Africa does not diversify and broaden its exports. JEL Classification: F10, F14

Understanding Manufactured Exporters at the Firm‐Level: New Insights from Using SARS Administrative Data

“…Studies on exporter premia include Rankin (); Rankin (); Naughtin and Rankin (); and Matthee et al . (). Rankin () uses cross‐sectional survey data to examine exporter characteristics.…”

“…Matthee et al . () use transaction‐level data from the Exporter Dynamics Database made available by the World Bank to decompose the churning (in terms of firms, products and destinations) within the trade margins. They focus on how the global financial crisis affected the super‐exporters and that they were more resilient and able to recover faster than the rest.…”

The South African manufacturing exporter story

“…Studies on exporter premia include Rankin (2001Rankin ( , 2013; Naughtin and Rankin (2014), and Matthee et al (2015). Rankin (2001) uses cross-sectional survey data to examine exporter characteristics.…”

“…Moreover, they are also more productive than the rest. Matthee et al (2015) use transaction-level data from the Exporter 5 Dynamics Database made available by the World Bank to decompose the churning (in terms of firms, products, and destinations) within the trade margins. They focus on how the global financial crisis affected the super-exporters and that they were more resilient and able to recover faster than the rest.…”

Can South Africa sustain and diversify its exports?

“…Although the country has undergone significant changes (democratising and liberalising trade in 1994), its export performance is still poor compared to its peers (Hausmann & Klinger, 2006). Furthermore, the majority of export growth (around 77 per cent) is generated through the intensive margin (Matthee et al, 2015).…”