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Sources of Subsectoral Growth in South Africa

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  • Fiona Tregenna

Abstract

While South Africa’s growth performance has improved somewhat in recent years, it has generally been poor over the past few decades. This article uses Chenery’s factor decomposition method to analyse the sources of growth in South Africa from 1970 to 2007. Using input-output data, the growth of each subsector is decomposed into components associated with export growth, import substitution, growth in domestic demand, and growth in intermediate demand. The results highlight the dependence on domestic demand expansion as a source of growth since 2000, especially for manufacturing. Subsectors which relied primarily on domestic demand expansion generally performed relatively poorly. Technological change is the only component of growth with a consistently positive and statistically significant correlation with subsectoral growth. The analysis contributes to a better understanding of growth in South Africa, particularly in terms of subsectoral dynamics.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 377.

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Length: 34 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:rza:wpaper:377

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Keywords: Growth; sectors; factor decomposition; structural change; Chenery; South Africa;

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