Unlocking Manufacturing Growth in South Africa: Firm Productivity, Labour Mobility and Participation

Carol Newman ()
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Carol Newman: Trinity College Dublin
Authors registered in the RePEc Author Service: Ilse Botha

No 337, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: This paper examines the sources of South Africa’s manufacturing underperformance through the lens of three interrelated mechanisms: within-firm productivity growth, the between-firm reallocation of resources, and labour mobility and participation. While manufacturing has historically played a central role in structural transformation by supporting productivity growth, export expansion, and relatively stable formal employment, its contribution to output and employment has declined steadily over the past two decades. The paper argues that this decline cannot be understood through aggregate trends alone. Instead, it reflects how distortions across firms and workers disrupt these mechanisms, constraining firm upgrading, weakening reallocation toward more productive producers, and limiting the extent to which labour mobility and participation translate into upward progression for workers and productivity growth for firms.

Keywords: Manufacturing; Productivity; allocative efficiency; firm heterogeneity; labour mobility; industrial policy; productivity proofing (search for similar items in EconPapers)
JEL-codes: D22 D24 L60 O14 O25 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2026-06
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Published in ERSA Working Paper Series, June 2026, pages 40

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Persistent link: https://EconPapers.repec.org/RePEc:rza:ersawp:337

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