O14

Industrialization; Manufacturing and Service Industries; Choice of Technology

Aid Volatility and Structural Economic Transformation in sub-Saharan Africa: Does Finance Matter?

This paper departs from the traditional aid–economic growth studies through its examination of the impact of aid and its volatility on sectoral growth by relying on panel dataset of 37 sub-Saharan African (SSA) countries for the period 1980–2014. Findings from our system generalised methods of moments (GMM) show that, while foreign aid significantly drives economic transformation, aid volatility deteriorates sectoral value additions with huge impact on the non–tradable sector and a no apparent effect on the agricultural sector.

Trade Liberalization, Rival Exporters and Reallocation of Production: An Analysis of Indian Manufacturing

Employing a difference-in-difference estimation technique on firm-level data on Indian exporters, we show that the removal of US textile and apparel quotas was associated with a relative increase in sales of products where India was previously quota-restricted,  but a relative decrease in sales of products where China was previously quota-restricted.  We hence highlight the importance of accounting for falling trade barriers for rival exporters in analyzing trade liberalization effects.

Sources of Subsectoral Growth in South Africa

While South Africa’s growth performance has improved somewhat in recent years, it has generally been poor over the past few decades. This article uses Chenery’s factor decomposition method to analyse the sources of growth in South Africa from 1970 to 2007. Using input-output data, the growth of each subsector is decomposed into components associated with export growth, import substitution, growth in domestic demand, and growth in intermediate demand. The results highlight the dependence on domestic demand expansion as a source of growth since 2000, especially for manufacturing.

The Impact of Trade Liberalization on Micro Enterprises: Do Banks Matter? Evidence from Indian Manufacturing

This paper looks at the impact of trade liberalization on output, factor intensity and labor productivity of micro enterprises with differential access to banks. It uses Indian data on micro enterprises employing fewer than ten workers in the manufacturing sector and finds that trade liberalization, measured by a fall in the tariff, is associated with higher enterprise output, capital-labor ratios and labor productivity in districts with a larger number of bank branches per capita.

Infrastructure and Growth in South Africa: Direct and Indirect Productivity Impacts of 19 Infrastructure Measures

Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd – out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements.

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