Product Market Competition, Productivity, and Jobs : The Case of South Africa
The degree of concentration and market power in South African markets has been the topic of much policy discussion. However, there has been little evidence on what drives market power and the impact of the degree of competition in South African mar...
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| Online Access: | http://documents.worldbank.org/curated/en/515591576592941445/Product-Market-Competition-Productivity-and-Jobs-The-Case-of-South-Africa http://hdl.handle.net/10986/33053 |
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okr-10986-330532022-09-20T00:12:45Z Product Market Competition, Productivity, and Jobs : The Case of South Africa Dauda, Seidu Nyman, Sara Cassim, Aalia MARKET COMPETITION PRODUCTIVITY JOB CREATION WAGE GROWTH The degree of concentration and market power in South African markets has been the topic of much policy discussion. However, there has been little evidence on what drives market power and the impact of the degree of competition in South African markets on economic outcomes. This paper improves on previous markup estimates for South Africa using a methodology developed by De Loecker and Warzynski (2012) applied to tax administrative data for 2010–14. The paper then explores the firm-level determinants of the estimated markups and assesses the link between competition and firm-level outcomes, including productivity, employment, and wages. The analysis finds that average markups across the economy appear to have risen between 2010 and 2014. Larger firms, higher-intensity exporters, and firms with greater sales shares charge higher markups than comparator firms in South Africa, even after controlling for efficiency. Moreover, lower product market competition has a significant, negative effect on productivity growth, employment growth, and wage growth in South African manufacturing industries. Higher sales-weighted and value-added-weighted average industry-level markups are associated with lower industry-level entry rates. The findings highlight the importance of implementing sound pro-competition government interventions and the significant economic benefits associated with such policies. 2019-12-19T16:32:56Z 2019-12-19T16:32:56Z 2019-12 Working Paper http://documents.worldbank.org/curated/en/515591576592941445/Product-Market-Competition-Productivity-and-Jobs-The-Case-of-South-Africa http://hdl.handle.net/10986/33053 English Policy Research Working Paper;No. 9084 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa South Africa |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
MARKET COMPETITION PRODUCTIVITY JOB CREATION WAGE GROWTH |
| spellingShingle |
MARKET COMPETITION PRODUCTIVITY JOB CREATION WAGE GROWTH Dauda, Seidu Nyman, Sara Cassim, Aalia Product Market Competition, Productivity, and Jobs : The Case of South Africa |
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Africa South Africa |
| relation |
Policy Research Working Paper;No. 9084 |
| description |
The degree of concentration and market
power in South African markets has been the topic of much
policy discussion. However, there has been little evidence
on what drives market power and the impact of the degree of
competition in South African markets on economic outcomes.
This paper improves on previous markup estimates for South
Africa using a methodology developed by De Loecker and
Warzynski (2012) applied to tax administrative data for
2010–14. The paper then explores the firm-level determinants
of the estimated markups and assesses the link between
competition and firm-level outcomes, including productivity,
employment, and wages. The analysis finds that average
markups across the economy appear to have risen between 2010
and 2014. Larger firms, higher-intensity exporters, and
firms with greater sales shares charge higher markups than
comparator firms in South Africa, even after controlling for
efficiency. Moreover, lower product market competition has a
significant, negative effect on productivity growth,
employment growth, and wage growth in South African
manufacturing industries. Higher sales-weighted and
value-added-weighted average industry-level markups are
associated with lower industry-level entry rates. The
findings highlight the importance of implementing sound
pro-competition government interventions and the significant
economic benefits associated with such policies. |
| format |
Working Paper |
| author |
Dauda, Seidu Nyman, Sara Cassim, Aalia |
| author_facet |
Dauda, Seidu Nyman, Sara Cassim, Aalia |
| author_sort |
Dauda, Seidu |
| title |
Product Market Competition, Productivity, and Jobs : The Case of South Africa |
| title_short |
Product Market Competition, Productivity, and Jobs : The Case of South Africa |
| title_full |
Product Market Competition, Productivity, and Jobs : The Case of South Africa |
| title_fullStr |
Product Market Competition, Productivity, and Jobs : The Case of South Africa |
| title_full_unstemmed |
Product Market Competition, Productivity, and Jobs : The Case of South Africa |
| title_sort |
product market competition, productivity, and jobs : the case of south africa |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/515591576592941445/Product-Market-Competition-Productivity-and-Jobs-The-Case-of-South-Africa http://hdl.handle.net/10986/33053 |
| _version_ |
1764477894388613120 |