Export Specialisation and Local Economic Growth

This paper aims to provide empirical evidence on whether export specialization or diversification is better for local economic growth. Using export data from 354 magisterial districts of South Africa for 1996 and 2001 we estimate spatial growth regressions that include measures of the degree of expo...

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Bibliographic Details
Published in:World economy 2010-04, Vol.33 (4), p.552-572
Main Authors: Naudé, Wim, Bosker, Maarten, Matthee, Marianne
Format: Article
Language:English
Subjects:
Agriculture
Comparative advantage (commerce)
Districts
Diversification
Economic Development
Economic growth
Economic impact analysis
Export composition
Export planning
Export-oriented industry
Exports
Exports and Imports
Foreign trade
Human Capital
Population Growth
Regression analysis
South Africa
Specialization
Studies
Trade policy
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Summary:This paper aims to provide empirical evidence on whether export specialization or diversification is better for local economic growth. Using export data from 354 magisterial districts of South Africa for 1996 and 2001 we estimate spatial growth regressions that include measures of the degree of export specialization and diversification. Overall, exporting regions outperform other (less or non‐) exporting regions. Also, we find that export specialisation, rather than export diversification, has been associated with local economic growth; with specialization in mining and agriculture being especially beneficial. Our results support the view that specialization in a locality’s area of comparative advantage is good for local economic development. We also find that localities with higher initial levels of human capital, and higher subsequent population growth, performed better. This is consistent with the belief that policies aimed at strengthening human capital and improving agglomeration economies, will enhance local economic development.
ISSN:0378-5920
1467-9701
DOI:10.1111/j.1467-9701.2009.01239.x