IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v13y2025i5p125-d1649620.html
   My bibliography  Save this article

The Impact of Trade Openness and ICT on Technical Efficiency of Township Economies in South Africa

Author

Listed:
  • Brian Tavonga Mazorodze

    (Department of Accounting and Economics, Faculty of Economic and Management Sciences, Sol Plaatje University, Kimberley 8301, South Africa)

Abstract

While the impact of trade openness on economic growth has been widely studied, its effect on township economies remains underexplored. In view of this empirical gap, this study examines the impact of trade openness proxied by export intensity on the technical efficiency of five major township economies in South Africa—Soweto, Khayelitsha, Alexandra, Tembisa, and Soshanguve—while considering the moderating role of information and communication technology (ICT). This aim speaks to the ongoing quest to unravel factors limiting the transformation of South African townships since the advent of democracy in 1994. The analysis uses an instrumental variable stochastic frontier model and annual panel data covering the 1995–2023 period. On average, the five townships were found to have operated 19% below their full potential during the sampling period, with Soweto being the least efficient. Holding constant factors peculiar to township economies, such as crime rates and informality, the main results show that ICT plays a positive moderating role in reducing trade-related technical inefficiencies of these townships. This finding underscores the importance of targeted policy interventions, such as investments in digital infrastructure and digital literacy programs, to ensure that township economies benefit from global markets and achieve their full potential.

Suggested Citation

  • Brian Tavonga Mazorodze, 2025. "The Impact of Trade Openness and ICT on Technical Efficiency of Township Economies in South Africa," Economies, MDPI, vol. 13(5), pages 1-22, May.
    • Handle: RePEc:gam:jecomi:v:13:y:2025:i:5:p:125-:d:1649620
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/13/5/125/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/13/5/125/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:13:y:2025:i:5:p:125-:d:1649620. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.