The Spatial Distribution of Manufacturing in South Africa 1970-1996, its Determinants and Policy Implications
32 Pages Posted: 17 Apr 2011
Date Written: June 1, 2007
This paper researches the change in regional specialisation and industry concentration in South African (SA) manufacturing 1970-96, and evaluates possible determinants of industry location. No evident trend towards greater regional specialisation or despecialisation emerges over most of the period if we take the economic weight of the regions into account. However, between 1993 and 1996, the period of international reintegration, all provinces but one became more specialised. Industry concentration also does not show a clear trend if we account for industry size, although industries of the same rank were more concentrated in the early 1990s than the beginning of the 1970s and 1980s. Drawing on predictions from trade and economic geography models, we find that high plant-internal scale economies, intensity in the use of human capital and high industry-specific productivity gradients between locations are associated with greater geographical concentration of an industry. Scale economies are the most important pro-concentration force. A greater deviation of labour intensity of production from the mean, and strong interfirm linkages, are associated with low geographical concentration. The latter results can be explained within the economic geography framework. Linkages are the most important determinant of industry geography.
Keywords: Spatial distribution of industry, South Africa
JEL Classification: R11, R12
Suggested Citation: Suggested Citation