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South African Manufacturing Performance In International Perspective 1970-1999

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  • Michiel Dijk

Abstract

This paper analyses the historical performance of the South African manufacturing sector in an international perspective. After a brief overview of the industrialisation process of South Africa during the 20th century, a binary comparison of manufacturing output and productivity between South Africa and the US is presented. The industry-of-origin approach is used to construct unit value ratios (UVRs), as an alternative to the exchange range for converting US and South African output data into the same currency. Subsequently, the UVRs are used to estimate labour and total factor productivity levels for total manufacturing and 13 manufacturing branches for the period 1970-1999 in comparison to the USA. Next, these results are used to compute relative unit labour costs, which shed light on the international competitiveness of the South African manufacturing sector at a detailed level. The study is part of the International Comparisons of output and Productivity (ICOP) project carried out at the universities of Groningen and Eindhoven. We find that there exists a considerable labour and total productivity gap between the US and South Africa, which is continuously widening over time. In 1970, labour productivity stood at 32 percent of US level, while it was only 20 percent in 1999. With respect to relative unit labour costs, the results show that on average, South Africa is competitive with the USA, albeit there are some industries which show consistent relative unit labour costs above US level.

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Bibliographic Info

Article provided by Economic Society of South Africa in its journal South African Journal of Economics.

Volume (Year): 71 (2003)
Issue (Month): 1 (03)
Pages: 119-142

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Handle: RePEc:bla:sajeco:v:71:y:2003:i:1:p:119-142

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Cited by:
  1. Janet Ceglowski & Stephen Golub, 2011. "Does China Still Have a Labor Cost Advantage?," CESifo Working Paper Series 3579, CESifo Group Munich.
  2. McKenzie, David, 2011. "How can we learn whether firm policies are working in africa ? challenges (and solutions?) for experiments and structural models," Policy Research Working Paper Series 5632, The World Bank.
  3. Jørn Rattsø & Torfinn Harding, 2009. "Looking Abroad, but Lagging Behind: How the World Technology Frontier Affects South Africa," Working Paper Series 10209, Department of Economics, Norwegian University of Science and Technology.

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