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Export Specialisation and Local Economic Growth
Author(s) -
Naudé Wim,
Bosker Maarten,
Matthee Marianne
Publication year - 2010
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2009.01239.x
Subject(s) - economics , economic geography , international trade , international economics , macroeconomics
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.