Manufacturing sector productivity growth drivers: Evidence from SADC member states

Abstract

This study investigates major drivers of manufacturing sector productivity growth of selected Southern African Development Community (SADC1) member countries. Using country-specific, fixed effects panel data modelled in a Cobb Douglas production function for the period 2000–2013, the study estimated manufacturing sector level data for nine SADC member states; namely, Zimbabwe, Malawi, Madagascar, Mozambique, Botswana, South Africa, Namibia, Mauritius and Tanzania. The country specific data was sourced from World Bank Development Indicators (2014). The study concludes that trade openness, technology transfer and capital investment positively influenced manufacturing sector productivity growth in the SADC countries. However, labour force and innovation are found to be influencing growth in the SADC region negatively. The study, therefore, recommends policy makers to put in place policy mechanisms aimed at promoting trade openness, technology transfer and capital investment for the region to realize meaningful growth in the manufacturing sector. The SADC presents an interesting and unexplored setting for studies focusing on regional growth. The general assumption is that the region shares cultural values, a colonial background and economically similar natural resources, and that growth patterns should, therefore, also be homogeneous to some extent.