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The Links Between Trade Policy And Total Factor Productivity In South Africa'S Manufacturing Sector1

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  • C. HARMSE
  • C.A. ABUKA

Abstract

This paper reconfirms the important links that exist between manufacturing productivity, trade orientation, industry specific characteristics and some macroeconomic variables. The dynamic GMM estimator used in the analysis shows that apart from being affected by trade measures, total factor productivity is strongly persistent. In addition, the evolution of the real exchange rate and inflation exert important effects on manufacturing productivity. Most importantly, the dynamic error component specification appears to be more efficient in modelling the effects on manufacturing productivity of policy change than the static approach.

Suggested Citation

  • C. Harmse & C.A. Abuka, 2005. "The Links Between Trade Policy And Total Factor Productivity In South Africa'S Manufacturing Sector1," South African Journal of Economics, Economic Society of South Africa, vol. 73(3), pages 389-405, September.
    • Handle: RePEc:bla:sajeco:v:73:y:2005:i:3:p:389-405
    DOI: 10.1111/j.1813-6982.2005.00026.x
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    References listed on IDEAS

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    1. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 245-276.
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