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Sub‐national growth rate differentials in South Africa: an econometric analysis

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  • W.A. Naudé
  • W.F. Krugell

Abstract

. This research note examines the determinants of economic growth at the sub‐national level in South Africa, and investigates cross‐regional medium term (1998–2002) growth rate differentials between 354 magisterial districts. A dynamic panel data regression model is used that includes measures of geography (distance and natural resources) as well as recent estimates of physical and human capital. We find that the significant determinants of local economic growth are distance from internal markets, human capital, export propensity, and the capital stock. Distance from international harbours, as a measure of transport costs, and urban agglomeration (or density) affects growth indirectly through its significant effect on the ability of a region to export. Overall, these results indicate that geography is important, independent of its effects on institutions, for economic growth. Bearing in mind a medium‐term focus, no evidence of absolute convergence could be found over a five‐year period, but the evidence tentatively suggests beta convergence.

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  • W.A. Naudé & W.F. Krugell, 2006. "Sub‐national growth rate differentials in South Africa: an econometric analysis," Papers in Regional Science, Wiley Blackwell, vol. 85(3), pages 443-457, August.
    • Handle: RePEc:bla:presci:v:85:y:2006:i:3:p:443-457
    DOI: 10.1111/j.1435-5957.2006.00090.x
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    References listed on IDEAS

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    Cited by:

    1. Chien-Chiang Lee & Chi-Chuan Lee & Chun-Ping Chang, 2015. "Globalization, Economic Growth and Institutional Development in China," Global Economic Review, Taylor & Francis Journals, vol. 44(1), pages 31-63, March.
    2. Guangqing Chi & David Marcouiller, 2011. "Isolating the Effect of Natural Amenities on Population Change at the Local Level," Regional Studies, Taylor & Francis Journals, vol. 45(4), pages 491-505.
    3. Stephanié Rossouw & Talita Greyling, 2017. "Regional disparities in non-economic quality of life in South Africa: convergence or divergence?," Working Papers 2017-06, Auckland University of Technology, Department of Economics.
    4. Beatrice D. Simo-Kengne & Manoel Bittencourt & Rangan Gupta, 2011. "House Prices and Economic Growth in South Africa: Evidence from Provincial-Level Data," Working Papers 201116, University of Pretoria, Department of Economics.
    5. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.

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