rhinos work
The SADC free trade agreement:
The potential regional movement of industry explored through New Economic Geography.
DISSERTATION
BY
RYAN DU TOIT
S0953237
March 4, 13
I confirm this is all my own work except where indicated:
Abstract:
The Southern African Development Community (SADC) introduced the final tariff reductions for their free trade area (FTA) the end of 2012. Many of the smaller countries from the regional bloc are concerned that implementing the FTA will negatively affect the location and distribution of industry within the bloc. In particular, these countries fear that industry is likely to relocate towards the larger more developed nations, namely South Africa.
This study makes use of the Theory of New Economic Geography (NEG) to explore the potential for industry dispersion in the SADC, focusing on the manufacturing industry. The study introduces the concept of regional integration agreements (RIAs) and carries out a brief overview of three of the largest RIAs currently existing in the world (SADC, EU and Mercosur). Secondly, the study introduces the Theory of New Economic Geography with a particular focus on the model developed by Krugman and Venables (1996). The study does a quick review of empirical tests done on NEG followed by a critique of the model. The framework of NEG is then applied to the SADC, EU and Mercosur to determine if NEG can explain the past industry migration. The study conducts an investigation on the distribution of the manufacturing industry in the SADC from 1980 up until 2005 using the Locational Gini Coefficient. The resulting Gini coefficients are compared to their counterparts from other regional blocs, such as the European Union (EU) and the Southern common market (Mercosur)
The study shows that the manufactures industry within the EU and SADC increased its level of concentration from 1980 up until 2000 after which the data shows that speed of increasing concentration begins to
The potential regional movement of industry explored through New Economic Geography.
DISSERTATION
BY
RYAN DU TOIT
S0953237
March 4, 13
I confirm this is all my own work except where indicated:
Abstract:
The Southern African Development Community (SADC) introduced the final tariff reductions for their free trade area (FTA) the end of 2012. Many of the smaller countries from the regional bloc are concerned that implementing the FTA will negatively affect the location and distribution of industry within the bloc. In particular, these countries fear that industry is likely to relocate towards the larger more developed nations, namely South Africa.
This study makes use of the Theory of New Economic Geography (NEG) to explore the potential for industry dispersion in the SADC, focusing on the manufacturing industry. The study introduces the concept of regional integration agreements (RIAs) and carries out a brief overview of three of the largest RIAs currently existing in the world (SADC, EU and Mercosur). Secondly, the study introduces the Theory of New Economic Geography with a particular focus on the model developed by Krugman and Venables (1996). The study does a quick review of empirical tests done on NEG followed by a critique of the model. The framework of NEG is then applied to the SADC, EU and Mercosur to determine if NEG can explain the past industry migration. The study conducts an investigation on the distribution of the manufacturing industry in the SADC from 1980 up until 2005 using the Locational Gini Coefficient. The resulting Gini coefficients are compared to their counterparts from other regional blocs, such as the European Union (EU) and the Southern common market (Mercosur)
The study shows that the manufactures industry within the EU and SADC increased its level of concentration from 1980 up until 2000 after which the data shows that speed of increasing concentration begins to