Firms and Value Chains in Southern Africa
Critical qualitative analysis based on methodology that integrates the World Bank Enterprise Surveys and trade data. Noted limitations – data availability resulting in lack of ability to compare all indicators across countries.
To provide evidence on the relative merits of exporting on an intra- or extra-regional basis for firms in Southern Africa and to draw policy implications.
The findings of the study are:
- SACU firms are highly likely to experience major or severe customs and trade regulations compared to most other regions, making it more likely that firms trade on an intra- rather than an extra-regional basis.
- The experience of firm’s manager is critical determinant on whether firms trade intra- or extra-regional.
- Firms exporting on extra-regional basis are more likely to be foreign-owned.
- A change in firm ownership and a new type of relationship with lead firms may be necessary in order to access some types of GVCs. All exporters in South Africa have a share of foreign ownership.
- Domestic firms may have more opportunities to launch their own manufactured and branded products within their home market or in neighbouring markets with similar levels of development.
- SACU firms are more likely to experience high or severe barriers to exporting in terms of customs and trade regulations. This encourages intra- as opposed extra-regional trade.
- Non-tariff barriers already noted as significant barrier
- Always assumption that firms have a choice of export market but this studies show that barriers affect that choice.
- Case study analysis in Southern Africa merits more attention in order to understand the specifics of the trading environment.