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Modelling the Regional Heterogeneity of South Africa's Trade
Author(s) -
Smet Koen
Publication year - 2013
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2012.01332.x
Subject(s) - endowment , economics , china , international free trade agreement , regional trade , economic geography , international economics , international trade , trade barrier , economic integration , factor endowment , bilateral trade , free trade , comparative advantage , geography , political science , archaeology , law
This paper develops a three‐dimensional Heckscher–Ohlin trade framework to discuss the regional heterogeneity of South Africa's trade pattern. First, a general analysis of trade data for the period 1993‐2006 displays significant differences in the South African trade pattern with the EU and China. Second, a symmetrical three‐dimensional trade model is constructed to explain trade among South Africa, the EU and China by means of differences in the endowment with skilled labour, less skilled labour and capital. The discussion of the actual trade model is visualised by means of the concept of the endowment triangle. Third, a detailed descriptive analysis that uses and combines three different classification measures supports the theoretical predictions of the developed trade model. The paper shows that the three‐dimensional model can be used to model South Africa's basic trade relationship.