Macro--Micro Linkages in Trade: Trade, Efficiency and Competitiveness of Manufacturing Firms in Durban, South Africa

Imraan Valodia and Myriam Velia

Journal of African Economies, 2006, vol. 15, issue 4, 688-721

Abstract: This paper attempts to address the paucity in micro-level research on the impact of trade liberalisation on manufacturing firms in South Africa. Using data from a survey of manufacturing firms in the Durban area, the second largest concentration of manufacturing activity in South Africa, we explore how firms are responding to trade liberalisation. We explore three sets of issues: the export orientation of firms, the effects of volatility in exchange rates, and the links between exports and firm behaviour, including productivity growth. We find that firms engage with the international economy both as exporters and as importers. This suggests that analyses focusing exclusively on exporting may be misleading. Firm size is an important indicator of export success. Our results indicate that some of the benefits deemed to accrue from trade liberalisation, such as reduction in the cost of inputs and productivity growth, are not evident among Durban firms. This poses a number of challenges for policymakers. Copyright 2006, Oxford University Press.

Date: 2006
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