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Industrial labor productivities and tariffs in South Africa. Identification based on multilateral liberalization reform

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  • Torfinn Harding
  • Jørn Rattsø

    ()
    (Statistics Norway)

Abstract

The analysis of the effect of tariffs for labor productivity faces the challenge of tariff policy endogeneity. Tariff policy is designed to promote economic development and the industrial sector tariff structure may reflect characteristics of the industries protected. We seek to identify the effect of tariffs by taking advantage of multilateral tariff liberalization using reductions in industrial sector tariffs in other world regions as instruments for sectoral tariff reductions in South Africa. The data cover 28 manufacturing sectors over the period 1988-2003. We find that tariff reductions have stimulated labor productivity when instrumented by multilateral tariffs. The OLS estimates show downward bias and supports the understanding that the government has given priority to tariff reductions in sectors with slow productivity growth.

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Bibliographic Info

Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 585.

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Date of creation: May 2009
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Handle: RePEc:ssb:dispap:585

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Keywords: Trade policy; policy evaluation; barriers to growth; technology adoption; South Africa; labor productivity;

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Cited by:
  1. Jørn Rattsø & Hildegunn E. Stokke, 2009. "Trade barriers to growth in South Africa: Endogenous investment-productivity-trade interaction," DEGIT Conference Papers c014_010, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Rattsø, Jørn & Stokke, Hildegunn E., 2012. "Trade policy in a growth model with technology gap dynamics and simulations for South Africa," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 1042-1056.
  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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