IDEAS home Printed from https://ideas.repec.org/p/rza/wpaper/330.html
   My bibliography  Save this paper

Competition, Industrial structure and Economic Growth

Author

Abstract

This paper takes as its starting point established findings on industrial conduct as measured by pricing power in South African industry. The South African findings are contrasted with recent results derived from firm-level data from China and India. A stark contrast emerges between China, with low mark-ups of price over marginal cost of production, and South Africa and India with high mark-ups. Given the impact of pricing power on productivity growth, we show that lack of competitive pressure in the manufacturing sector, contributes one important explanation of why China has a relatively large, while South Africa and India have a relatively small manufacturing sector. We also provide an estimate of foregone employment opportunities due to the presence of pricing power has carried for South Africa. We provide a framework in terms of which the impact of success of potential policy intervention in the labour market can be assessed, given the findings on industrial structure. Returning to Chinese firm level data, we also examine whether there is a case to be made for differential policy treatment of established, new entrant, and struggling firms - and find that there is little evidence to support such a claim. For China we find that state intervention in the manufacturing sector has primarily served to suppress pricing power. We conclude with reflections on competitive pressures in other sectors of the economy, as well as final inferences on desirable policy interventions designed to stimulate growth and employment creation.

Suggested Citation

  • J.W. Fedderke, 2013. "Competition, Industrial structure and Economic Growth," Working Papers 330, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:330
    as

    Download full text from publisher

    File URL: http://www.econrsa.org/node/659
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stan du Plessis & Nico Katzke & Evan Gilbert & Chris Hart, 2015. "Mark-ups and competition: a comparison of the profitability of listed South African industrial companies," Working Papers 02/2015, Stellenbosch University, Department of Economics.

    More about this item

    Keywords

    Competition; Industrial Structure; Economic Growth; South Africa; India; Industry;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:rza:wpaper:330. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charles Tanton). General contact details of provider: http://edirc.repec.org/data/ersacza.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.