Browsing by Author "Mhlanga, Samuel Vika"
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- ItemEssays on industrial dynamics: evidence from Swaziland(Stellenbosch : Stellenbosch University, 2017-12) Mhlanga, Samuel Vika; Rankin, Neil; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.ENGLISH SUMMARY : This thesis is completely based on a unique and rich establishment-level panel dataset that has never been used before provided by the Central Statistical Office (CSO) of Swaziland to study industrial dynamics. It begins with an assessment of aggregate resource flows among sectors of the Swazi economy to understand the nature of structural change over a period of 10 years since 1994. We find a slight shift in output and labour from the high-productivity manufacturing to low-productivity agriculture and services sectors, potentially developing into what is also known as the manufacturing hollowing out phenomenon. Within the manufacturing sector itself, the evolution of firm-size distribution appears to converge to a bimodal structure; while deeper investigation produces a missing ‘missing middle’ in the economy. The analysis goes on to evaluate the job creating prowess of small firms. The general finding again is that job destruction dominates job creation, regardless of firm-size category. However, large firms destroy and create more jobs than small firms, even without relevant data to control for firm age. This suggests an absence of transition channels from subsistence to transformational entrepreneurship in the Swazi manufacturing sector. An in-depth analysis of the drivers of aggregate productivity growth is also carried out. It is found that resource reallocation across firms is productivity enhancing while longitudinal technical efficiency is productivity reducing in the manufacturing sector. However, the firm entry-exit dynamic is the main contributor to aggregate productivity growth. In the case of investment dynamics and unobserved heterogeneity, there is neither significant impact of the lagged investment variable nor presence of individual firm-specific heterogeneity that might raise firms’ propensity to invest in plant, machinery and equipment. That is, the impact of unobserved firm-specific characteristics underlying investment decisions is also insignificant. The most interesting finding though is that the cost of uncertainty in a trade liberalization environment can also be measured in our framework. We find that missing investments at time 𝑡𝑡−1 reduce the propensity to invest at time 𝑡𝑡 by a significant margin. Furthermore, by interacting missing investments with labour, we estimate a significant probability of capital substitution for labour. When an endogenous switching regime model of investment is estimated, the single investment regime produced by fixed and random effects models is validated.