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South African Manufacturing Industry Structure and its Implications for Competition Policy


  • Johannes Fedderke
  • Witness Simbanegavi


This paper surveys the literature on the manufacturing sector in South Africa, focusing on concentration and markup levels, with a view to inform policy. The literature has employed a number of different measures of industrial concentration, namely, the Gini and Rosenbluth indices, the Occupancy Count, the C5% index and, to a lesser extent, Concentration Ratios and the Herfindahl-Hirschman index. Generally, manufacturing industry concentration is found to be high and increasing up to 1996. However, all the measures show decreasing concentration post-1996. In respect of markups, the evidence suggests that markups in South Africa are significantly higher than they are in comparable industries world-wide and they appear to be non-declining. However, there are dissenting voices on this point. We then juxtapose the concentration and price-cost margins findings to industry performance (at the macro level). In particular, we review the literature that examines the relations between concentration and price-cost margins on the one hand and output growth, productivity growth, employment, employment growth, investment and export and import competitiveness on the other. We then draw implications for competition policy in South Africa, pointing out areas that need further research as well as international best practices.

Suggested Citation

  • Johannes Fedderke & Witness Simbanegavi, 2008. "South African Manufacturing Industry Structure and its Implications for Competition Policy," Working Papers 111, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:111

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    Cited by:

    1. Fosu, Samuel, 2013. "Capital structure, product market competition and firm performance: Evidence from South Africa," The Quarterly Review of Economics and Finance, Elsevier, vol. 53(2), pages 140-151.
    2. Samuel Fosu, 2013. "Capital Structure, Product Market Competition and Firm Performance: Evidence from South Africa," Discussion Papers in Economics 13/11, Department of Economics, University of Leicester.

    More about this item


    manufacturing industry; industry concentration; South Africa; competition policy;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L6 - Industrial Organization - - Industry Studies: Manufacturing


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