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An Empirical Investigation of Trade Liberalization and Trade Patterns in South Africa

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  • Sibanisezwe Alwyn Khumalo
  • Asrat Tsegaye

Abstract

The study made use of the gravity model to analyze the behavior of South Africa’s trade patterns at industry level. Using SIC 2-digit level data for the period 1996-2013 based on two sub-samples, 1996-2004 and 2005-2013, the study found that trade liberalization was not universally influential on trade patterns. Some industries did not exhibit significant behavior changes as a result of tariff liberalization. The results show that Agriculture, mining ores, crude oil, machinery and transport are the only industries from the selected sample of nine that are significantly influenced by trade liberalization policy. Furthermore, empirical results indicate that trade liberalization hinders extensive margins and does not encourage intensive margins.

Suggested Citation

  • Sibanisezwe Alwyn Khumalo & Asrat Tsegaye, 2018. "An Empirical Investigation of Trade Liberalization and Trade Patterns in South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(5), pages 125-137.
    • Handle: RePEc:rnd:arjebs:v:10:y:2018:i:5:p:125-137
    DOI: 10.22610/jebs.v10i5(J).2503
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    References listed on IDEAS

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    1. J Fedderke & P Vaze, 2001. "THE NATURE OF SOUTH AFRICA'S TRADE PATTERNS BY ECONOMIC SECTOR, AND THE EXTENT OF TRADE LIBERALIZATION DURING THE COURSE OF THE 1990′s," South African Journal of Economics, Economic Society of South Africa, vol. 69(3), pages 436-478, September.
    2. Anthony Black, 2001. "Globalization and restructuring in the South African automotive industry," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(6), pages 779-796.
    3. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
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    5. Buono, Ines & Lalanne, Guy, 2012. "The effect of the Uruguay round on the intensive and extensive margins of trade," Journal of International Economics, Elsevier, vol. 86(2), pages 269-283.
    6. Wei-Chih Chen, 2013. "The Extensive and Intensive Margins of Exports: The Role of Innovation," The World Economy, Wiley Blackwell, vol. 36(5), pages 607-635, May.
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    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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