Page 94 - University of Pretoria RESEARCH REVIEW 2018

The export premium Marianne Matthee, Gordon Institute of Business Science (GIBS)
Exports contribute to the generation of employment and economic growth within a country. Indeed, empirical evidence shows that exporting firms pay higher wages and employ more employees than non-exporting firms.
This so-called ‘export premium’, particularly in the manufacturing sector, has been the focus of Professor Marianne Matthee at
GIBS. The basic premise is that the manufacturing sector, and therefore manufacturing exports, have the ability to create economic and employment multipliers across value chains. In South Africa, policymakers have long acknowledged the important link between stronger exports and sustainable job creation and economic growth. Yet, research on the relationship between exporting, employment and wages is still limited, especially at the level of firms.
Matthee and co-researchers have addressed this relationship by using business entity-level data obtained from administrative tax records. Their work has formed part of a research
project undertaken by the United Nations Universities World Institute for Development Economics Research (UNU-WIDER), in partnership with National Treasury and the South African Revenue Service (SARS).*
The availability of SARS data enabled them to study the population of manufacturing firms, and to make international comparisons.
In line with many global studies,
they have found that South African exporters in the manufacturing sector employ more workers and pay higher wages (i.e., they create better-paying jobs) than non-exporters. Their research has also shown that the export and employment premium within exporters depend on the size of the firm, the number of products exported, the number and type of destinations served, as well as the
firm’s export status. Exporters operate under very different circumstances and enhancing exports in South Africa would require a nuanced approach.
The researchers were also able to track employment growth over a four-year period. They found that overall employment growth is faster in manufacturing exporting firms than in non-exporting manufacturing firms. These exporting firms also tend to employ higher-skilled and more experienced (older) workers. Firms that entered the export market had faster employment growth, and those who continued with exports displayed faster growth in skilled jobs than in unskilled jobs.
The findings, co-authored with Carli Bezuidenhout, a doctoral student
at North-West University, and Neil Rankin from Stellenbosch University, were published in Development Southern Africa. Their research gives some insight into aspects that require further deliberation, and the need to deepen understanding of the firm-level relationship between skills and jobs.
* In 2017, UNU-WIDER expanded to become what is now called the Southern Africa – Toward Inclusive Economic Development (SA-TIED). National Treasury hosts the administrative data in a newly-developed data-lab, and the ongoing research on a wide range of pertinent topics on the South African economy contributes towards policy debates and formulation.
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