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A firm level analysis of trade, technology and employment in South Africa

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  • Lawrence Edwards

    (School of Economics, University of Cape Town, Rondebosch, South Africa)

Abstract

This paper uses two firm level surveys, the National Enterprise (NE) survey and the Greater Johannesburg Metropolitan Area (GJMA) survey, to explore the implications of globalization for employment in South Africa. These relationships are explored using cross-tabulations and estimated labour demand functions. The paper finds that rising import penetration negatively affected employment in large firms, but not small firms. Relatively large declines in employment also occurred within export firms, despite improvements in export competitiveness and export growth through trade liberalization. Finally, the study finds that skill-biased and trade-induced technological change, as reflected in increased use of computers, foreign investment and the importation of raw material inputs, have raised the skill intensity of production. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jid.1062
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 16 (2004)
Issue (Month): 1 ()
Pages: 45-61

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Handle: RePEc:wly:jintdv:v:16:y:2004:i:1:p:45-61

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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References

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  1. Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
  2. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S44-71, July.
  3. Berman, Eli & Bound, John & Machin, Stephen, 1997. "Implications of Skill-Biased Technological Change: International Evidence," Working Paper Series 486, Research Institute of Industrial Economics.
  4. Barry, Frank & Bradley, John, 1997. "FDI and Trade: The Irish Host-Country Experience," Economic Journal, Royal Economic Society, vol. 107(445), pages 1798-1811, November.
  5. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," World Bank Economic Review, World Bank Group, vol. 11(1), pages 17-32, January.
  6. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
  7. Greenaway, David & Hine, Robert C. & Wright, Peter, 1999. "An empirical assessment of the impact of trade on employment in the United Kingdom," European Journal of Political Economy, Elsevier, vol. 15(3), pages 485-500, September.
  8. Arvind Subramanian & Gunnar Jonsson, 2000. "Dynamic Gains from Trade - Evidence from South Africa," IMF Working Papers 00/45, International Monetary Fund.
  9. Gordon H. Hanson & Ann Harrison, 1995. "Trade, Technology, and Wage Inequality," NBER Working Papers 5110, National Bureau of Economic Research, Inc.
  10. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
  11. Edwards, Lawrence & Golub, Stephen S., 2004. "South Africa's International Cost Competitiveness and Exports in Manufacturing," World Development, Elsevier, vol. 32(8), pages 1323-1339, August.
  12. L Edwards, 2001. "Globalisation And The Skills Bias Of Occupational Employment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 69(1), pages 40-71, 03.
  13. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  14. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
  15. Aguirregabiria, Victor & Alonso-Borrego, Cesar, 2001. "Occupational structure, technological innovation, and reorganization of production," Labour Economics, Elsevier, vol. 8(1), pages 43-73, January.
  16. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, 09.
  17. Milner, Chris & Wright, Peter, 1998. "Modelling Labour Market Adjustment to Trade Liberalisation in an Industrialising Economy," Economic Journal, Royal Economic Society, vol. 108(447), pages 509-28, March.
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Citations

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Cited by:
  1. Andries Bezuidenhout & Grace Khunou & Sarah Mosoetsa & Kirsten Sutherland & John Thoburn, 2007. "Globalisation and poverty: impacts on households of employment and restructuring in the textiles industry of South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(5), pages 545-565.
  2. Alberto Behar, 2004. "Estimates of labour demand elasticities and elasticities of substitution using firm-level manufacturing data," SALDRU/CSSR Working Papers 098, Southern Africa Labour and Development Research Unit, University of Cape Town.
  3. Frank Cörvers & Jaanika Meriküll, 2007. "Occupational structures across 25 EU countries: the importance of industry structure and technology in old and new EU countries," Economic Change and Restructuring, Springer, vol. 40(4), pages 327-359, December.
  4. Nathalie Chusseau & Joel Hellier, 2012. "Inequality in emerging countries," Working Papers 256, ECINEQ, Society for the Study of Economic Inequality.
  5. Rulof Burger & Ingrid Woolard, 2005. "The State of the Labour Market in South Africa after the First Decade of Democracy," SALDRU/CSSR Working Papers 133, Southern Africa Labour and Development Research Unit, University of Cape Town.
  6. Joern Rattsoe & Hildegunn Ekroll Stokke, 2009. "Wage inequality, comparative advantage and skill biased technical change in South Africa," Working Paper Series 9909, Department of Economics, Norwegian University of Science and Technology.
  7. Andrews, Matthew, 2008. "Is Black Economic Empowerment a South African Growth Catalyst? (Or Could It Be...)," Working Paper Series rwp08-033, Harvard University, John F. Kennedy School of Government.
  8. Jenkins, Rhys, 2005. "Globalization, Production and Poverty," Working Paper Series RP2005/40, World Institute for Development Economic Research (UNU-WIDER).
  9. Edwards, Lawrence J & Garlick, Robert, 2008. "Trade flows and the exchange rate in South Africa," MPRA Paper 36666, University Library of Munich, Germany.
  10. Rahman, Tauhidur & Mittelhammer, Ronald C., 2006. "Measuring the Impact of Globalization on the Well-being of the Poor: Methodology and an Application to Africa," 2006 Annual meeting, July 23-26, Long Beach, CA 21100, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  11. J. Paul Dunne & Lawrence Edwards, 2006. "Trade Technology and Employment: A case Study of South Africa," Working Papers 0602, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  12. Rhys Jenkins, 2006. "Globalization and the labour market in South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(5), pages 649-664.

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