This thesis investigates the impact of domestic transport costs and location on exports
originating from exporting regions within a developing country. It is presented in the
form of three articles, each addressing a different aspect. These articles are accompanied
by a literature review of the background and impact of domestic transport costs on trade.
The first article provides empirical evidence for the significance of domestic
transport costs in exports and the spatial location of manufacturing exporters. Cubic-spline
density functions are used and the results indicate (a) the proximity to a port is an
important consideration in most export-oriented manufacturing firms' location, with
more than 70% of manufactured exports in South Africa originating from a band of 100
km from an export hub; and (b) there appears to be a second band of these firms at a
distance of between 200 and 400 km from the hub. Between 1996 and 2004,
manufactured exports in the band between 200 km and 400 km from the nearest hub
increased, suggesting either an increase in manufactured exports that depend on natural
resources due to demand factors, and/or a decrease in domestic transport costs, amongst
others.
The second article investigates the question of the location of exporters of
manufactured goods within a country. Based on insights from new trade theory, the new
economic geography (NEG) and gravity-equation modelling, an empirical model is
specified with agglomeration and increasing returns (the home-market effect) and
transport costs (proxied by distance) as major determinants of the location decision of
exporters. Data from 354 magisterial districts in South Africa are used with a variety of
estimators (OLS, Tobit, RE-Tobit) and allowances for data shortcomings (bootstrapped
standard errors and analytical weights) to identify the determinants of regional
manufactured exports. It is found that the home-market effect (measured by the size of
local GDP) and distance (measured as the distance in km to the nearest port) are
significant determinants of regional manufactured exports. This article contributes to the
literature by using developing country data, and by adding to the small literature on this
topic. This article complements the work of Nicolini (2003) on the determinants of
exports from European regions and finds that the home-market effect is relatively more
important in the developing country context (South Africa), a finding consistent with
theoretical NEG models such as those of Puga (1998). The third article is an empirical study of the relationship between export diversity
and economic growth in a developing country context. Using export data from19 sectors
within 354 sub-national (magisterial) districts of South -Africa, various measures of subnational
export diversity are constructed. It is found that it is not only important how
much is exported, but that it is also important what it is that is exported. Regions with
less specialisation and more diversified exports generally experienced higher economic
growth rates, and contributed more to overall exports from South Africa. It is also found
that distance (and thus domestic transport costs) from a port is inversely related to the
degree of export diversity. Estimating a cubic-spline density function for the Herfindahl
index measure of export diversity, it is found that export diversity declines as the distance
from a port (export hub) increases. Most magisterial districts with high export diversity
values are located within 100 km of the nearest port. Furthermore, comparing the cubic-spline
density functions for 1004 with those of 1996 shows that distance (domestic
transport costs) has become more important since 1996 (under greater openness) with
magisterial districts located further than 100 km from the ports being less diverse in 2003
than in 1996. One may speculate that a possible explanation for this changing pattern of
export diversity may be the impact of greater foreign direct investment (FDI) in South
Africa since 1996. / Thesis (Ph.D. (International Commerce))--North-West University, Potchefstroom Campus, 2007
| Identifer | oai:union.ndltd.org:NWUBOLOKA1/oai:dspace.nwu.ac.za:10394/1296 |
| Date | January 2007 |
| Creators | Matthee, Marianne |
| Publisher | North-West University |
| Source Sets | North-West University |
| Detected Language | English |
| Type | Thesis |
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