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Competition and Productivity Growth in South Africa

  • Aghion, Philippe
  • Braun, Matias
  • Fedderke, Johannes

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. The definitive version is available at www3.interscience.wiley.com.

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File URL: http://dash.harvard.edu/bitstream/handle/1/3350068/aghion_southafrica.pdf
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Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3350068.

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Date of creation: 2008
Date of revision:
Publication status: Published in Economics of Transition
Handle: RePEc:hrv:faseco:3350068
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Web page: http://www.economics.harvard.edu/

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  1. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 701-728, May.
  2. De Sousa, Jose & Mayer, Thierry & Zignago, Soledad, 2011. "Market access in global and regional trade," MPRA Paper 35602, University Library of Munich, Germany.
  3. Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
  4. Johannes Fedderke, 2004. "Investment in Fixed Capital Stock: Testing for the Impact of Sectoral and Systemic Uncertainty," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 165-187, 05.
  5. Aghion, Philippe, et al, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Review of Economic Studies, Wiley Blackwell, vol. 68(3), pages 467-92, July.
  6. Joaquim Oliveira Martins & Stefano Scarpetta, 1999. "The Levels and Cyclical Behaviour of Mark-ups Across Countries and Market Structures," OECD Economics Department Working Papers 213, OECD Publishing.
  7. Harris, Christopher & Howitt, Peter & Vickers, John & Aghion, Philippe, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Scholarly Articles 12375013, Harvard University Department of Economics.
  8. Blundell, Richard & Griffith, Rachel & van Reenen, John, 1999. "Market Share, Market Value and Innovation in a Panel of British Manufacturing Firms," Review of Economic Studies, Wiley Blackwell, vol. 66(3), pages 529-54, July.
  9. Pesaran, M.H., 1996. "The Role of Economic Theory in Modelling the Long Run," Cambridge Working Papers in Economics 9612, Faculty of Economics, University of Cambridge.
  10. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
  11. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
  12. Dalia Hakura, 1998. "The Effects of European Economic Integrationon the Profitability of Industries," IMF Working Papers 98/85, International Monetary Fund.
  13. Johannes Fedderke & Chandana Kularatne & Martine Mariotti, 2007. "Mark-up Pricing in South African Industry," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(1), pages 28-69, January.
  14. Lawrence Edwards, 2005. "Has South Africa Liberalised Its Trade?," South African Journal of Economics, Economic Society of South Africa, vol. 73(4), pages 754-775, December.
  15. Richard Blundell & Rachel Griffith & John Van Reenen, 1994. "Dynamic count data models of technological innovation," IFS Working Papers W94/10, Institute for Fiscal Studies.
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