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Trade integration and firm performance: Evidence from South Africa

Author

Listed:
  • Megan Shongwe
  • Ashley Gandy
  • Aimable Nsabimana
  • Michael Kilumelume

Abstract

This study examines the 2013 South Africa-China Strategic Trade Agreement (STA) and its implications on firms using a decade of microdata in South Africa. Exploiting the policy's quasi-exogenous nature, we show that the STA is associated with a reorientation toward Chinese capital goods, increasing firm-level capital-labour ratios. We also find suggestive evidence that gains in sales and value-added are consistent with a 'scale effect' that may have offset potential labour displacement from capital-labour substitution.

Suggested Citation

  • Megan Shongwe & Ashley Gandy & Aimable Nsabimana & Michael Kilumelume, 2026. "Trade integration and firm performance: Evidence from South Africa," WIDER Working Paper Series wp-2026-100, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2026-100
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    References listed on IDEAS

    as
    1. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    2. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    3. 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.
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