Role and determinants of structural transformation in South Africa

Abstract

This study evaluates the contribution of structural transformation to aggregate labor productivity growth over the period 1960-2011 in South Africa, using canonical decomposition approach and assesses the determinants of this structural change with a focus on Chinese competition, trade liberalization and land reform (initiated by government in 1994). The decomposition results suggest that structural transformation was growth enhancing over 1960-1975, 1975-1981, and 1981-1994. While it was growth reducing over 1994-2001 and 2001-2011. Reallocation effect as well within effect varies across sectors. The analysis of determinants using panel data regression at the sector level and structural change indicator as outcome variable reveals that, across all sectors considered, the convergence of structural change is not an unconditional process and total factor productivity (TFP) is negatively correlated with structural change. Furthermore, Chinese competition, trade liberalization and land reform seem to have sector specific effect.

Date of Award	2021
Original language	English
Awarding Institution	University of Namur
Supervisor	Romain Houssa (Supervisor) & Modeste Daye (Co-Supervisor)