An assessment of the investment climate in South Africa
Most aspects of South Africa's investment climate-the location-specific factors that shape opportunities and incentives for firms to invest productively, create jobs, and grow-are favorable. The majority of large, registered firms believe that the legal system is able to protect their property rights. Infrastructure is reliable. Tax rates are relatively low. The burden of regulation is comparable to other middle-income countrries. Few firms pay bribes. And most firms have adequate access to credit. In many dimensions, South Africa has a good investment climate.Consistent with this, large South African firms are very productive. Labor productivity is far higher than in the most productive low-income countries in Sub-Saharan Africa and compares favorably with other middle-income countries such as Brazil, Lithuania, Malaysia, and Poland. And although labor productivity in South Africa is slightly lower than in the most productive cities in China, it is over three times higher than in China as a whole.So, why hasn't South Africa been growing faster? As this title explores, while the investment climate is generally favorable, some problems remain. Firms appear to be particularly concerned about four areas: difficulty hiring skilled and educated workers, rigid labor regulations, exchange rate instability, and crime. Using rigorous statistical information on these and related topics, the book aims to assist policy makers and private sector stakeholders in developing reforms that will improve firm performance and growth.
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An Analysis of Firm Performance
Characteristics of the Labor Market
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40 percent 75th percentile access to finance Asian-owned firms average Black Economic Empowerment Brazil China coefficient comparator countries constraints cost of crime cost of financing Crime and Security Cross-Country Comparison differences dummy Eastern Cape Economic employees employment growth exchange rate Fedderke Figure firms in South firms rated firms reported Gauteng Hangzhou higher impact increase industry Investment Climate Surveys Johannesburg Kenya KwaZulu-Natal labor costs labor market labor productivity labor regulations large firms less Lithuania loan major Malaysia manufacturing firms manufacturing sector median firm middle-income countries nonexporters OECD operations and growth percent of enterprises percent of firms percent of sales Poland Pretoria problem rand rated access Retail/wholesale SACU sample Senegal serious obstacle severe obstacle skilled workers Source South Africa South African firms South African Manufacturing Statistics South Africa suggests trade U.S. dollar union unskilled workers value added wage-firm Western Cape white-owned firms World Bank