A widely held view is that export diversification constitutes an important component of export led growth, and poses a major challenge for many developing countries. Given this, the role of export diversification on economic growth warrants a fresh analysis in South Africa. The primary objective of this study is to determine the impact of export diversification on economic growth in South Africa. In this context, the study seeks to establish the relationship between export diversification, export stability and export growth. Initially, the study examines the extent and structure of export diversification in South Africa; it then empirically establishes the link between export diversification, export stability and export growth. Finally, it develops a model and investigates the effects of export diversification on economic growth in South Africa. As an attempt to fulfill the proposed objectives, this study uses quarterly data for the period 1980 to 2012 as well as data for 28 selected groups of commodities to investigate the effects of export diversification on economic growth in South Africa. Measures of export diversification and structural changes in exports in the context of South Africa were discussed. The findings of this study are that the Commodity Specific Cumulative Experience function showed that plots for manufactured commodities are shifted to the right indicating that the commodities are non-traditional in nature whereas, plots for primary commodities are shifted to the left. Results also indicated that South Africa relies more on traditional exports than manufactured exports. Various measures of export instability were used to calculate the export instability index in South Africa. The results of the study reveal that the South African export basket is slightly diversified, and the less diversified or primary commodities are associated with high instability VECM approach was used to allow us to establish the extent of influence of export diversification and other explanatory variables on economic growth. Consistent with other researchers, the study found that export diversification plays significant roles to economic growth in South Africa. A number of diagnostic checks were employed to validate the parameter evaluation of the outcomes achieved by the model. The model passed all the diagnostic checks. On the whole, the results to a larger extent painted a pictured that export diversification is important or drives economic growth in South Africa. Corroborating our findings with work of other scholars, we conclude that our results are complementary.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:ufh/vital:11489 |
| Date | January 2014 |
| Creators | Choga, Ireen |
| Publisher | University of Fort Hare, Faculty of Management & Commerce |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Doctoral, Doctor of Commerce (in Economics) |
| Format | 210 leaves; 30 cm, pdf |
| Rights | University of Fort Hare |
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