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Competition and productivity growth in South Africa

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  • Philippe Aghion
  • Matias Braun
  • Johannes Fedderke

Abstract

This article shows that mark‐ups are significantly higher in South African manufacturing industries than they are in corresponding industries worldwide. We test for the consequences of this low‐level of product market competition on productivity growth. The results of the paper are that high mark‐ups have a large negative impact on productivity growth in South African manufacturing industry. Our results are robust to three different data sources, two alternative measures of productivity growth, and three distinct measures of the mark‐up. Controlling for potential endogeneity of regressors does not eliminate the findings.

Suggested Citation

  • Philippe Aghion & Matias Braun & Johannes Fedderke, 2008. "Competition and productivity growth in South Africa," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 741-768, October.
  • Handle: RePEc:bla:etrans:v:16:y:2008:i:4:p:741-768
    DOI: 10.1111/j.1468-0351.2008.00336.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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