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A growth analysis of the South African revealed comparative advantage exports within the BRICS economies.

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2018

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Abstract There is much debate about the long-term benefit of South Africa’s membership to the BRICS partnership. Generally, there has been a perception that all the other BRICS partner countries are growing to the detriment of the South African economy. The purpose of this research was to analyse the performance of 20 product categories with a high revealed comparative advantage for South Africa within the BRICS bloc, to determine if these product categories have experienced growth in the period of 2012 to 2016. The population for this research comprised of the 37 product categories with a revealed comparative advantage for South Africa within the BRICS bloc in 2012, that the country could potentially export in greater quantities, or for the first time, to other BRICS markets. A quantitative approach was adopted for this study. Non-probability convenience sampling was used to select a sample comprised of all the 20 product categories that had a revealed comparative advantage which was much higher than that of the leading import sources in the BRICS bloc for South Africa in 2012. To understand the impact of trade volumes on the trade values and therefore assess growth, the ordinary least squares regression method was applied on the time series data of the export categories. The study found a strong positive relationship between the flows of trade volumes and the strength of trade. The aim of this study was to analyse the level of growth for the identified exports during the specified period of 2012 to 2016 and the findings revealed that eight of the categories had experienced significant growth in trade during the period under review, while eleven experienced a decline in trade during the same period. One category of the exports did not experience any trade for the period, and thus remained unchanged. The findings further indicated that at country level trade was significantly higher for South Africa with China than the other BRICS partners. In conclusion, the product categories with a high revealed comparative advantage for South Africa within the BRICS bloc experienced significant growth in trade values and trade volumes between 2012 and 2016 implying a benefit to South Africa in joining the BRICS bloc. It is recommended that deeper diplomatic engagement by the South African government be embarked on with the BRICS partners to create further access to markets for South African exporters. Key words: Revealed comparative advantage, international trade theory, trade agreements, BRICS.

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Master’s Degree. University of KwaZulu-Natal, Durban.

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