- Title
- Trade liberalisation, the real exchange rate and sectoral employment : a case study of South Africa
- Creator
- Sibanda, Kin
- Subject
- Foreign exchange rates Employment (Economic theory) Free trade -- South Africa
- Date
- 2016
- Type
- Thesis
- Type
- Doctoral
- Type
- PhD
- Identifier
- http://hdl.handle.net/10353/12777
- Identifier
- vital:39360
- Description
- This study examined the relationship between trade liberalisation, the real exchange rate and sectoral employment in South Africa for the period 1994 to 2014. Firstly, using quarterly time series data, the Autoregressive Distributed Lag (ARDL) technique was employed to formally check if South African real exchange rates are responsive to trade liberalisation. This was done to see if trade liberalisation impacts real exchange rates in South Africa, to the extent that they cannot be controlled concurrently in the subsequent models. Based on the ARDL results, trade liberalisation does not have a significant effect on the exchange rate. However, when the real exchange rate is an independent variable of trade liberalisation, the results show that real exchange rates affect trade, specifically the export propensity index. The next step was to assess the impact of trade liberalisation and real exchange rate on sectoral employment using quarterly panel data for South Africa from 1994 to 2014 controlling for both sector-specific and macro-economic variables. The study employed diverse panel data analysis techniques to separate the sectoral effects, starting with broad sectors followed by the disaggregated sectors, to identify the sectors most affected by real exchange rates and trade liberalisation. The Generalised method of Moments (GMM) results reveal that a unit increase in exchange rate (implying appreciation), causes employment to go down by about 9 percent in South Africa. The same relationship is depicted from the Pooled Mean Group (PMG) estimations in both the short run and long run. Random coefficients (betas) show that the real exchange rate negatively affects the primary and secondary sector with a positive but insignificant effect on the tertiary sector. The sub-sectors negatively hit hard by real exchange rates are communication, mining and transport. The results also show that trade liberalisation is linked to both job destruction and job creation. The static models reveal that trade openness has a statistically positive and significant impact on employment in the short run while the PMG estimator results show that the effect is negative and only significant in the short run. The dynamic models (GMM and PMG) showed trade liberalisation (as proxied by trade openness and import propensity) has a statistical and significantly positive short run impact on employment. This implies that selective trade liberalisation strategies are needed in order for South Africa to maximise the gains from trade.
- Format
- 205 leaves
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management and Commerce
- Language
- English
- Rights
- University of Fort Hare
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UFH Department of Economics
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | SIBANDA KIN _ DOCTORATE THESIS FINAL FINAL_November 2016.pdf | 3 MB | Adobe Acrobat PDF | View Details Download |