Industry concentration in South African manufacturing industry: Trends and consequences, 1972-96

Johannes Fedderke, Gábor Szalontai

Research output: Contribution to journalArticle

19 Scopus citations

Abstract

This paper reports industry concentration measures for the South African manufacturing sector over the 1972-1996 period for the three digit industry classification. Noted are high level of industry concentration in South African manufacturing, and a rising trend in concentration across a wide range of industries as measured by the Gini coefficient, though some countervailing evidence emerges on the Rosenbluth index. Analytically the paper examines the impact of concentration on employment and investment rates. Results show that increased concentration unambiguously lowers employment. For investment rates, increased inequality of market share serves to raise investment rates, while falling firm numbers for any given inequality of market share lowers investment rates. The difference is consistent with a disciplining effect of a competitive fringe of firms on the behaviour of large firms in a market.

Original languageEnglish (US)
Pages (from-to)241-250
Number of pages10
JournalEconomic Modelling
Volume26
Issue number1
DOIs
StatePublished - Jan 2009

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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