Trade And Industrial Policy Analysis With Specific Reference To Automotive Industry Programmes: Lessons For Developing Countries

Over the last two decades the global auto industry has undergone important structural transformations and policy reforms posing complex challenges for low-volume automobile producing countries. More specifically, during the 1990s, rapid growth in sales and production were experienced in the global auto market, which has interestingly, been largely attributable to strong growth registered in emerging markets instead of the Triad regions. This paper provides a sectoral perspective analysing trade and industrial policies of selected emerging auto countries and concludes with recommendations for future automotive policy particularly for South Africa and other developing countries that are important to developing internationally competitive and sustainable automotive sectors

An analysis of the impact of the motor industry development programme (MIDP) on the development of the South African motor vehicle industry.

Thesis (M.Com.)-University of Durban-Westville, 2001.The study aims to research the performance of past and present motor industry policy in South Africa - with special reference to Phase VI of the local content programme and the Motor Industry Development programme (MIDP) - in the light of the domestic macroeconomic environment and global developments in the world automotive industry. The overall objective of this dissertation is to contribute to the debate on motor industry policy which concerns what future policy would be appropriate for the development of a viable and competitive motor vehicle industry. Thus this study is primarily policy-oriented, and the empirical analysis produced deals with important developments in the local motor and component industries and attempts to examine key variables to establish the likely impact of industry-specific policy changes - both past and future. The method of investigation involves the study of relevant theoretical literature regarding domestic automotive policy, and considers policies of low-volume automobile producing economies, especially Australia, Philippines, India and Malaysia. Also, empirical data of various sub-sectors of manufacturing in South Africa were examined and compared to the motor vehicle sector in order to determine the extent to which the macroeconomic state of the domestic economy as distinct from automotive policy might explain the performance of the South African motor industry. The dissertation presents a review of the local content programme of motor industry policy in South Africa since the early 1960s. It examines the claim that import-substituting policy in the motor industry actually had a negative impact on the country's balance of payments. The study finds questionable whether local content policy contributed significantly to the large net foreign exchange usage by the motor industry in real terms. There is evidence that increases in the nominal industry trade deficit can largely be explained by the weakening of the Rand, especially during the mid-1980s. Also, empirical data was used to make an examination of the performance of automotive exports under Phase VI and the MIDP in the context of economy-wide trade liberalization. It was found that exports of automotive products grew significantly under both Phase VI and the MIDP in real Rand terms. Thus, it seems probable that industry-specific policy played a major role in the strong export performance of the sector since the late 1980s through to the 1990s. The study then reviews the revised version of the impact of the MIDP and considers the future of the industry. The state of the domestic macroeconomic environment and globalization of the international automobile industry, including the influence of Transnational Corporations' (TNCs') strategies, will undoubtedly determine the future direction of South Africa's automotive sector. In the short to medium term, we might expect an increase in imported vehicles and some rationalization of the industry. Over the longer term, the possibility of fewer OEMs and component suppliers, and automotive exports are likely to rise as trade and the inflow of foreign investment accelerates due to foreign collaboration and global competition. A simple theoretical model applicable to the South African automotive industry attempts to show the welfare implications of a protective automotive regime (similar to Phase VI) and compares it with that of a more liberal (tariffs-only) automotive regime that may be considered as a likely policy-option for South Africa post-MIDP. The theoretical analysis indicates that the tariffs-only policy is superior to that of a more protective regime in that static efficiency losses are lower. However, the dynamic effects of such policy changes and of possible TNC responses to them, which are referred to in the previous paragraph, are not included in this simple model

Economic analysis of intra-industry trade : the case of South Africa’s automotive industry

Over recent years, international trade flows of automotive products have experienced rising trends. Thus, the need to gain a better understanding of trade theories that could explain such trade flows. Until recently, the theoretical and empirical distinction of intra-industry trade (IIT) into patterns of horizontally differentiated (by variety) intra-industry trade (HIIT) and vertically differentiated (by quality) intra-industry trade (VIIT) has become crucial because each IIT pattern may potentially be influenced in different manners by country and industry factors (Greenaway, Hine&Milner, 1995). The objective of this thesis is twofold. Firstly, to measure the empirical significance of IIT in the automobile industry between South Africa and its bilateral trading partners and to decompose total IIT (TIIT) into VIIT and HIIT patterns. Secondly, to develop empirical models to investigate potential country- and industry-specific determinants of IIT patterns in the South African automobile industry. The empirical strategy adopted in this thesis is a gravity model spanning the period 2000 to 2007. The automobile industry is a principal industrial sector in the South African economy contributing notably to trade, investment, employment and national output. The structure and conduct of the industry is aligned with several elements of IIT theories and thus represents an important and fascinating case of IIT patterns to investigate. Therefore, the findings of this thesis will be valuable to trade policy analysts and manufacturers in the local and global automotive industries. According to the objectives, the significance of IIT is estimated using the trade overlap index and the empirical separation of total intra-industry trade (TIIT) into VIIT and HIIT is conducted using the threshold method. The empirical results reveal the presence of significant levels of IIT in automotive trade flows between South Africa and its bilateral trading partners. In accordance with theoretical expectations, the empirical investigation signifies the existence of high shares of VIIT dominating TIIT in the South African automobile industry. Moreover, the empirical analysis postulates that, within VIIT, the domestic automobile industry potentially produces and exports high quality automotive products proposing that such VIIT can be partly explained by fragmentation and international production processes. Next, gravity models are estimated to investigate the determinants of IIT patterns in the automobile industry. The econometric results of the gravity models of VIIT, HIIT and TIIT are statistically and economically significant in the context of the fixed effects method of estimation and in accordance with new trade theories. The empirical results reveal that relative difference in economic size, trade openness, foreign direct investment (FDI) and tariffs stimulates VIIT, whilst distance, economies of scale and automotive assistance negatively affect it. Conversely, relative difference in economic size, FDI and automotive assistance negatively affects HIIT, whereas trade openness and depreciation of the exchange rate positively influences it. Thus, the findings of the thesis assert that IIT patterns of VIIT and HIIT in the automobile industry are influenced differently by country and industry determinants, revealing that the theoretical and empirical distinction of TIIT is important. The thesis proposes advancing trade liberalisation and deregulation of the South African automobile industry that could attract greater efficiency-seeking FDI complementary to trade and as a consequence enhance IIT levels.Thesis (PhD)--University of Pretoria, 2011.Economicsunrestricte

Dicarbon­yl[4-(2,6-dimethyl­phenyl­amino)­pent-3-en-2-onato-κ2 N,O]rhodium(I)

In the title compound, [Rh(C13H16NO)(CO)2], a square-planar coordination geometry is observed around the RhI atom, formed by the N and O atoms of the bidentate ligand and two C atoms from two carbonyl ligands. The RhI atom is displaced from the plane through these surrounding atoms by 0.0085 (2) Å. The dihedral angle between the benzene ring and the N—C—C—C—O plane is 89.82 (6)°, and the N—Rh—O bite angle for the bidentate ligand is 90.53 (6)°. An inter­molecular C—H⋯O inter­action is observed between a methyl group of the benzene ring and a carbonyl O atom

Using Parahydrogen Induced Polarization to Study Steps in the Hydroformylation Reaction.

A range of iridium complexes, Ir(η3-C3H5)(CO)(PR2R’)2 (1a-1e) [where 1a, PR2R’ = PPh3, 1b P(p-tol)3, 1c PMePh2, 1d PMe2Ph and 1e PMe3] were synthesized and their reactivity as stoichiometric hydroformylation precursors studied. Para-hydrogen assisted NMR spectroscopy detected the following intermediates: Ir(H)2(η3-C3H5)(CO)(PR2R’) (2a-e), Ir(H)2(η1-C3H5)(CO)(PR2R’)2 (4d-e), Ir(H)2(η1-C3H5)(CO)2(PR2R’) (10a-e), Ir(H)2(CO-C3H5)(CO)2(PR2R’) (11a-c), Ir(H)2(CO-C3H7)(CO)2(PR2R’) (12a-c) and Ir(H)2(CO-C3H5)(CO)(PR2R’)2 (13d-e). Some of these species exist as two geometric isomers according to their multinuclear NMR characteristics. The NMR studies suggest a role for the following 16 electron species in these reactions: Ir(η3-C3H5)(CO)(PR2R’), Ir(η1-C3H5)(CO)(PR2R’)2, Ir(η1-C3H5)(CO)2(PR2R’), Ir(CO-C3H5)(CO)2(PR2R’), Ir(CO-C3H7)(CO)2(PR2R’) and Ir(CO-C3H5)(CO)(PR2R’)2. Their role is linked to several 18 electron species in order to confirm the route by which hydroformylation and hydrogenation proceeds

An analysis of the impact of the first phase of South Africa's motor industry development programme (midp), 1995-2000

The South African motor vehicle industry is an important branch of the local manufacturing sector, contributing significantly to manufacturing value added and employment. Over the last decade, the local industry has undergone a series of policy reforms, and in recent years has increasingly been exposed to globalisation. This article reviews the role of government policy in shaping the industry, and examines the impact of the first phase of the Motor Industry Development Programme on the industry for the period 1995-2000 in respect of domestic production, automotive industry employment, export performance and the automotive trade balance. The article concludes that even though the industry registered strong export growth that contributed to improving the automotive trade deficit, it was deficient in sustaining domestic production and employment levels. The imminent challenge for the local industry's development is to maintain its export growth trajectory in the long term in the absence of costly government protective incentive mechanisms.

An empirical examination of import demand for pulses in India

India is the largest producer and importer of pulses in the world. Since 1970, the Indian food economy has undergone major policy reforms, including trade liberalisation, that had the effect of opening up its domestic pulse market to international trade. This market is very lucrative and of major significance to the world pulse economy. Therefore, given the increasing evidence linking import demand and economic variables, an understanding of the impact of these variables on import demand for pulses in India is warranted. The import demand functions for total pulses, chickpea and lentils were estimated by autocorrelation regression procedure using time-series data for the period 1970 through to 2000. Empirical results indicate that real GDP, population, urbanisation, exchange rate and relative price are key determinants of import demand for pulses in India

Time-series estimation of import demand functions for pulses in India

Purpose - This study seeks to examine empirically import demand for total pulses, chickpeas and lentils in India based on the concept of unit root and cointegration. Design/methodology/approach - The Stock-Watson dynamic OLS (DOLS) model - which is robust to small sample and eliminates simultaneity bias - is used to derive the long-run price, income and urbanisation elasticities of import demand. The data covers the period 1970-2000. Findings - Results indicate that real GDP, relative price and urbanisation are the key determinants of import demand for pulses in India. The estimated long-run elasticities of import demand with respect to income (relative price) are 0.4 (-1.7) for chickpeas, 0.56 (-0.87) for lentils and 0.36 (0.00) for total pulses. The estimated long-run elasticities of import demand with respect to urbanisation are 9.9 for chickpeas, zero for lentils and 7.2 for total pulses. The policy implications of the results are discussed. Originality/value - Provides evidence that the response of import demand for pulses to key determinants differ substantially from product to product

Intra-industry trade : a methodology to test the automobile industry in South Africa

This paper provides a study of the theory and empirical evidence of intra-industry trade (IIT) and relates it specifically to South Africa's automobile industry. The automobile industry in South Africa is a key sector within the national economy and has experienced increased trade and foreign investment in recent years, and thus represents an important case study of IIT. In view of this, the paper proposes a methodology that may be used in future to assess the pattern and determinants of IIT between South Africa and its main trading partners in the automobile industry