South African exporters and the global crisis: intensive margin shock, extensive margin hangover

South Africa - 21 November 2017

This paper examines how changes at the intensive margin (established exporters exporting existing products to established markets) and the extensive margin (new exporters, products or markets) contribute to South Africa’s export growth and how these were affected by the global financial crisis of 2008‒09. The paper reveals that the intensive margin is the more important contributor to export growth, accounting for more than three quarters of observed growth. The intensive margin contracted significantly during the global financial crisis but bounced back to pre-crisis levels quickly. However, the impact on the extensive margin persisted after the crisis with lower levels of entry of firms, new products and new destinations. The short-term impact of the crisis was mitigated by the concentration of South African exports among larger, more productive super-exporters. However, the fall in entry of new firms, products and destinations as a result of the crisis may mean that this concentration persists to this day and, at least over the next few years, South Africa will not diversify and broaden its exports.

Available from: http://onlinelibrary.wiley.com/doi/10.1111/saje.12094/full

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