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CID Working Paper No. 132

Competition and Productivity Growth in South Africa

Philippe Aghion, Matias Braun, and Johannes Fedderke

August, 2006

A publication of the CID South Africa Growth Initiative

Abstract

Using three different panel data sets, the authors show: (i) that mark-ups are significantly higher in South African manufacturing industries than they are in corresponding industries worldwide; (ii) that competition policy (i.e. a reduction of mark-ups) should have largely positive effects on productivity growth and employment in South Africa.

Keywords: South Africa, competition, mark-ups

JEL codes: O55, L40, O40

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