South Africa's International Cost Competitiveness And Exports In Manufacturing

Document Type

Article

Publication Date

8-1-2004

Published In

World Development

Abstract

The new South African government has embraced globalization, with mixed results to date. Controversies center on South Africa's international cost competitiveness and whether South African exports respond to changes in competitiveness. We measure competitiveness by relative unit labor costs. We find that South African relative unit labor costs declined in the 1990s, but are still high relative to other developing countries. Econometric analysis reveals a strong effect of relative unit labor costs on exports.

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