Competition, industrial development and structural transformation: Lessons from South Africa
Venue: Copenhagen Business School, room 2Ø.071, Dalgas Have 15, 2000 Frederiksberg
Session 1: Competition, productivity and industrial development (13:00-14:30)
Competition policy and industrial development in South Africa
Simon Roberts* and Pamela Mondliwa (University of Johannesburg)
This paper considers the role of competitive rivalry in processes of structural transformation through the lens of the South African petrochemical to plastics value chain. South Africa is an interesting example in this regard given the little change observed in structure, despite far-reaching market-oriented economic reforms and opening up of the economy. The experience does not support the Schumpeterian faith in entry and efficient markets, which will allow innovators to challenge incumbents. Instead, it points to the implications of pervasive information asymmetries and other market imperfections along with imperfect competition and the advantages which can be built up by incumbents. The review of competition enforcement and regulation with regard to chemicals and plastic products indicates the limits of a simplistic approach to understanding competition as simply arrangements which impede otherwise well-functioning markets and the implications for industrial development.
Discussants: John Rand (University of Copenhagen) and Michael Wendelboe Hansen (Copenhagen Business School)
Resource misallocation and total factor productivity in South African manufacturing firms
Carol Newman (Trinity College Dublin, Ireland) John Rand* (University of Copenhagen, Denmark) Mpho Tsebe (National Treasury, South Africa)
Misallocation of labor and capital can greatly reduce aggregate productivity. In this study, we use tax administrative data to examine the extent of resource misallocation in the South African context. We focus on the extent to which specific identifiable distortions, including the inefficient allocation of credit and government incentives for the use of different inputs, affect the allocation (or mis-allocation) of capital and labor across firms. We quantify the extent to which alleviating these distortions would improve productivity for the manufacturing sector in South Africa. We also analyze heterogeneity in the extent of misallocation along the firm size distribution and identify firm size categories where policy distortions are having the biggest impact on productivity.
Discussant: Simon Roberts (University of Johannesburg)
Session 2: Business power and regulation (14:45-16:15)
The evolution of power and governance in the South African wine value chain
Stefano Ponte* (CBS)
Power has been a foundational concept in global value chain (GVC) research. Yet, in most GVC scholarship, power is not explicitly defined and is applied as a unitary concept, rather than as having multiple dimensions. Clarifying the concept of power has become particularly urgent in recent years as GVC research has proliferated beyond dyads of transacting firms or firm-state linkages and incorporated other stakeholders and mechanisms such as NGOs, labor unions, standards, norms and conventions. In this article, we propose a typology for the varied meanings and usages of power in GVC governance. We delineate two principal dimensions: trans- mission mechanisms – direct and diffuse; and arena of actors – dyads and collectives. Combined, these two dimensions yield four ideal types of power in GVC governance: bargaining, demonstrative, institutional and constitutive. We offer brief illustrations of these four types of power and provide an agenda for further research in the field.
Discussant: Pamela Mondliwa (University of Johannesburg)
The political economy of structural transformation in South Africa
Sumayya Goga, Pamela Mondliwa* and Simon Roberts (University of Johannesburg)
This paper examines the relationships between the structure of the economy, economic performance, the share of returns from economic activity, and different forms of business power in South Africa. Drawing from political economy frameworks, the paper analyses how specific business interests set agendas and shape policy to maintain economic power and in turn influence outcomes. Drawing from the Metals, Machinery and Equipment (MME) value chain, the paper engages with how the interests of incumbents have prevailed despite changes in their main sources of power. Our analysis shows that economic structure is a key source of business power, and that the relative strength of upstream actors in value chains facilitates their interests over those of downstream industries, thus limiting the scope of structural transformation.
Discussant: Morten Ougaard (Copenhagen Business School)
|Session 3: Next steps – possible future collaboration and research agenda (16:15-16:45)|