Premium
Resource utilisation Efficiency: A South African Provincial Evaluation
Author(s) -
Heerden Chris,
Rossouw Riaan
Publication year - 2014
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/saje.12037
Subject(s) - subsidy , data envelopment analysis , production (economics) , business , government (linguistics) , capital (architecture) , scale (ratio) , order (exchange) , factors of production , resource (disambiguation) , natural resource economics , economics , geography , finance , market economy , mathematical optimization , computer network , linguistics , philosophy , mathematics , cartography , archaeology , computer science , macroeconomics
The objective of this paper is to analyse the utilisation of production capacity and total under‐utilisation in order to identify weak‐performing industries across the nine South African provinces. Detecting inefficiencies within the different provinces will help to identify where sound managerial or government intervention is required, which can contribute to the future success of the New Growth Path Framework and the Strategic Integrated Projects. Using a multistage data envelopment analysis model at the subnational level, several categories of production factors are explored: intermediate demand, labour, capital, as well as taxes and subsidies. The results emphasise South Africa's weak infrastructure and the failure to effectively promote stability in managing factor inputs. The results further illustrate that industry scale efficiency for water and electricity are poorest across all provinces, highlighting the current water and energy supply concerns in South Africa and problem areas associated with the National Development Program.