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Integration and intra-industry trade adjustment in South Africa

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  • Lennart Petersson

Abstract

This article analyses intra-industry trade adjustment by the Southern African Customs Union after 1994, and links between trade liberalisation and employment are examined. The traditional Grubel-Lloyd index is complemented by marginal inter- and intra-industry trade measures, and trade expansion of sectors is scaled, related to change in total exports and imports. In three different empirical approaches, large differences are found: in the level of intra-industry trade (IIT) between different sectors (categorised into resource-based, labour-intensive, scale-intensive and differentiated industries); in the level of IIT of individual sectors in trade with the SADC6, the European Union and the rest of the world; and in the economic significance of trade expansion for different industries and with different trading partners. Trade expansion is dominated by differentiated and scale-intensive industries, indicating that the main economic gain of international integration is found in the opportunity to exploit economies of scale in a larger market. IIT and marginal IIT are positively related to increases in labour productivity, and negatively related to employment change. Interindustry trade and both export and import expansions are positively related to employment gain, but only export is positively related to increased labour productivity.

Suggested Citation

  • Lennart Petersson, 2002. "Integration and intra-industry trade adjustment in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 19(2), pages 239-259.
    • Handle: RePEc:taf:deveza:v:19:y:2002:i:2:p:239-259
    DOI: 10.1080/03768350220132468
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    References listed on IDEAS

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    1. Marius Brülhart & Robert C. Hine (ed.), 1999. "Intra-Industry Trade and Adjustment," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-27173-3, March.
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    Cited by:

    1. Mats Lundahl & Lennart Petersson, 2009. "Post-Apartheid South Africa: An Economic Success Story?," WIDER Working Paper Series RP2009-56, World Institute for Development Economic Research (UNU-WIDER).
    2. Dražen Derado, 2008. "Effects of Trade Liberalization in Croatia: An Approximation of the Integration Effects with the EU," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 11(1), pages 81-96, May.
    3. Sarbapriya Ray, 2012. "Productivity Growth in Some Energy Intensive Manufacturing Industries in India: An Analytical Assessment," International Journal of Economics and Financial Issues, Econjournals, vol. 2(1), pages 54-70.

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