Abstract
This thesis examines the validity of Kaldor’s growth laws across the provinces of South Africa. The main purpose is to investigate whether Kaldor’s proposition that manufacturing is the “engine of growth” applies to the South African economy. This paper therefore assesses the importance of the manufacturing sector across the different provinces of South Africa and its ability to effectively drive economic growth and structural change in the country. We approach this question by testing Kaldor’s growth laws using a dynamic panel dataset for the nine South African provinces over the period 1995 to 2016. In addition, we employ the fixed-effects and random-effects models and use the Hausman test to determine which model is better suited to provide estimates that reflect the South African economy. The Hausman test found that the fixed-effects model is the most appropriate model to test Kaldor's growth laws. The results obtained from the estimates provide mixed support for Kaldor’s growth laws, as the first two laws are supported, while the third law is not.
M.Phil. (Industrial Policy)