IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-2019-93.html
   My bibliography  Save this paper

Agglomeration and productivity in South Africa: Evidence from firm-level data

Author

Listed:
  • Hammed Amusa
  • Njeri Wabiri
  • David Fadiran

Abstract

Using comprehensive, anonymized tax administrative data for the 2008-14 period, we examine firm-level productivity in South Africa. Measures of firm-level productivity are included in a spatial autoregressive model that assesses spillovers from total factor productivity originating from agglomeration economies and the spatial diffusion of productivity shocks. We find that across South Africa's firms, intermediate inputs have the highest impact on firm productivity.

Suggested Citation

  • Hammed Amusa & Njeri Wabiri & David Fadiran, 2019. "Agglomeration and productivity in South Africa: Evidence from firm-level data," WIDER Working Paper Series wp-2019-93, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2019-93
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp-2019-93.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    3. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    4. Kelejian, Harry H. & Prucha, Ingmar R., 2010. "Specification and estimation of spatial autoregressive models with autoregressive and heteroskedastic disturbances," Journal of Econometrics, Elsevier, vol. 157(1), pages 53-67, July.
    5. Dominique Simonis, 2002. "Working Paper 16-02 - The New Economic Geography : a survey of the literature," Working Papers 0216, Federal Planning Bureau, Belgium.
    6. Ron Boschma & Simona Iammarino, 2009. "Related Variety, Trade Linkages, and Regional Growth in Italy," Economic Geography, Clark University, vol. 85(3), pages 289-311, July.
    7. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    9. Todd M. Schmit & Jeffrey S. Hall, 2013. "Implications of Agglomeration Economies and Market Access for Firm Growth in Food Manufacturing," Agribusiness, John Wiley & Sons, Ltd., vol. 29(3), pages 306-324, June.
    10. Kurt A. Hafner, 2013. "Agglomeration economies and clustering -- evidence from German and European firms," Applied Economics, Taylor & Francis Journals, vol. 45(20), pages 2938-2953, July.
    11. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    12. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LLC, vol. 4(2), pages 113-123, June.
    13. Daniel J. Graham & Patricia S. Melo & Piyapong Jiwattanakulpaisarn & Robert B. Noland, 2010. "Testing For Causality Between Productivity And Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(5), pages 935-951, December.
    14. Sheng, Yu & Song, Ligang, 2013. "Re-estimation of firms' total factor productivity in China's iron and steel industry," China Economic Review, Elsevier, vol. 24(C), pages 177-188.
    15. repec:hal:pseose:hal-00812695 is not listed on IDEAS
    16. repec:hal:wpspec:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc6ihim is not listed on IDEAS
    17. Pontus Braunerhjelm & Benny Borgman, 2004. "Geographical Concentration, Entrepreneurship and Regional Growth: Evidence from Regional Data in Sweden, 1975-99," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 929-947.
    18. Duncan Pieterse & Elizabeth Gavin & C. Friedrich Kreuser, 2018. "Introduction to the South African Revenue Service and National Treasury Firm‐Level Panel," South African Journal of Economics, Economic Society of South Africa, vol. 86(S1), pages 6-39, January.
    19. Daniel J. Graham, 2007. "Agglomeration, Productivity and Transport Investment," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 317-343, September.
    20. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    21. repec:spo:wpmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc6ihim is not listed on IDEAS
    22. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    23. Sai Ding & Alessandra Guariglia & Richard Harris, 2016. "The determinants of productivity in Chinese large and medium-sized industrial firms, 1998–2007," Journal of Productivity Analysis, Springer, vol. 45(2), pages 131-155, April.
    24. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    25. Richard Harris & John Moffat, 2015. "Plant-level determinants of total factor productivity in Great Britain, 1997–2008," Journal of Productivity Analysis, Springer, vol. 44(1), pages 1-20, August.
    26. Marianne Matthee & Neil Rankin & Tasha Webb & Carli Bezuidenhout, 2018. "Understanding Manufactured Exporters at the Firm‐Level: New Insights from Using SARS Administrative Data," South African Journal of Economics, Economic Society of South Africa, vol. 86(S1), pages 96-119, January.
    27. Danlin Yu & Yehua Dennis Wei, 2008. "Spatial data analysis of regional development in Greater Beijing, China, in a GIS environment," Papers in Regional Science, Wiley Blackwell, vol. 87(1), pages 97-117, March.
    28. Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), 2005. "Industrial Clusters and Inter-Firm Networks," Books, Edward Elgar Publishing, number 3577.
    29. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc6ihim is not listed on IDEAS
    30. Anders Malmberg & Bo Malmberg & Per Lundequist, 2000. "Agglomeration and Firm Performance: Economies of Scale, Localisation, and Urbanisation among Swedish Export Firms," Environment and Planning A, , vol. 32(2), pages 305-321, February.
    31. Shanzi Ke, 2010. "Agglomeration, productivity, and spatial spillovers across Chinese cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 157-179, August.
    32. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    33. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc6ihim is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Gornig & Alexander Schiersch, 2019. "Agglomeration Economies and the Firm TFP: Different Effects across Industries," Discussion Papers of DIW Berlin 1788, DIW Berlin, German Institute for Economic Research.
    2. Giorgio Fazio & Enza Maltese, 2015. "Agglomeration Externalities and the Productivity of Italian Firms," Growth and Change, Wiley Blackwell, vol. 46(3), pages 354-378, September.
    3. Giulio Cainelli & Roberto Ganau & Donato Iacobucci, 2016. "Do Geographic Concentration and Vertically Related Variety Foster Firm Productivity? Micro-Evidence from Italy," Growth and Change, Wiley Blackwell, vol. 47(2), pages 197-217, June.
    4. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    5. Lionel Fontagné & Gianluca Santoni, 2015. "Firm Level Allocative Inefficiency: Evidence from France," Working Papers hal-01299818, HAL.
    6. Mohamed Amara & Khaled Thabet, 2019. "Firm and regional factors of productivity: a multilevel analysis of Tunisian manufacturing," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(1), pages 25-51, August.
    7. Giulio Cainelli & Andrea Fracasso & Giuseppe Vittucci Marzetti, 2015. "Spatial agglomeration and productivity in Italy: A panel smooth transition regression approach," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 39-67, November.
    8. Roberto Ganau, 2016. "Productivity, Credit Constraints and the Role of Short-Run Localization Economies: Micro-Evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 50(11), pages 1834-1848, November.
    9. Rita Almeida & Ana M. Fernandes, 2013. "Explaining local manufacturing growth in Chile: the advantages of sectoral diversity," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2201-2213, June.
    10. Hoang, Manh Cuong & Schiller, Daniel, 2023. "Which firms benefit the most from agglomeration? New evidence from an emerging country with consistent measure of productivity," Journal of Asian Economics, Elsevier, vol. 86(C).
    11. Mohamed Amara, 2019. "Firm Performance and Agglomeration Effects: Evidence from Tunisian Firm-level Data," Working Papers 1297, Economic Research Forum, revised 2019.
    12. Hundt, Christian & Holtermann, Linus & Steeger, Jonas & Bersch, Johannes, 2019. "Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis," ZEW Discussion Papers 19-008, ZEW - Leibniz Centre for European Economic Research.
    13. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2012. "Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China," IDE Discussion Papers 354, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    14. Roberto Ganau & Andrés Rodríguez†Pose, 2018. "Industrial clusters, organized crime, and productivity growth in Italian SMEs," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 363-385, March.
    15. Ehrl, Philipp, 2013. "Agglomeration economies with consistent productivity estimates," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 751-763.
    16. Segundo Camino‐Mogro & Natalia Bermudez‐Barrezueta, 2021. "Productivity determinants in the construction sector in emerging country: New evidence from Ecuadorian firms," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2391-2413, November.
    17. Graham, Daniel J. & Gibbons, Stephen, 2019. "Quantifying Wider Economic Impacts of agglomeration for transport appraisal: Existing evidence and future directions," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    18. Samuel Bazzi & Amalavoyal V. Chari & Shanthi Nataraj & Alexander D. Rothenberg, 2017. "Identifying Productivity Spillovers Using the Structure of Production Networks," Working Papers WR-1182, RAND Corporation.
    19. Carlos Carreira & Luís Lopes, 2015. "Are Small Firms More Dependent on the Local Environment than Larger Firms? Evidence from Portuguese Manufacturing Firms," International Studies in Entrepreneurship, in: Rui Baptista & João Leitão (ed.), Entrepreneurship, Human Capital, and Regional Development, edition 127, chapter 0, pages 263-280, Springer.
    20. Hundt, Christian & Holtermann, Linus & Steeger, Jonas & Bersch, Johannes, 2019. "Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis," MPRA Paper 91802, University Library of Munich, Germany.

    More about this item

    Keywords

    Agglomeration; Firm productivity; South Africa;
    All these keywords.

    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:unu:wpaper:wp-2019-93. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    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.