THE BARRIER MODEL OF PRODUCTIVITY GROWTH: SOUTH AFRICA
The barrier model of productivity growth suggests that individual
country productivity is related to the world technology frontier disturbed
by national barriers. We offer a country study of the barrier model exploiting
the dramatic changes in the linkages to the world economy in South Africa.
The productivity growth in the manufacturing sector panel for 1970-2003
covers a period of political and economic turbulence and international
sanctions. The econometric analysis uses tariffs as measure of barrier
and fixed effects estimation to concentrate inference to time series properties.
The model shows how productivity growth can be understood as a combination
of world frontier growth and the tariff barrier to international spillovers.
The estimates establish a long run relationship where domestic productivity
follows the world frontier and with change of the barrier affecting transitional