South Africa's Export Edge: Uncovering Opportunities in Zimbabwe
DOI:
https://doi.org/10.51137/wrp.ijarbm.791Keywords:
Exports, South Africa, Zimbabwe, Gravity ModelAbstract
This study analyses South Africa’s exports to Zimbabwe as explained by the exchange rates, distance, Gross Domestic Products and population. The two countries share strong economic, historic and social ties to the extent that in 1922 Zimbabwe (then Rhodesia) was invited to join the Union of South Africa as a 5th province which it refused through a referendum. The economic and general survival dependency of Zimbabwe on South Africa leaves the former a de facto province of the latter. It is against this background that this study is conducted with the aim of establishing potential levels of South Africa’s exports to Zimbabwe and carrying out speed of convergence tests to identify product categories with untapped potential to the symbiotic benefit of both countries. The study is based on 21 product categories. Data on South Africa’s exports to SADC countries in the product categories was used to estimate the gravity models that were simulated to establish the respective potential export flows to Zimbabwe. Panel data methods were applied to estimate the gravity models using the random effects procedure as guided by specification tests. The results of the gravity model estimations show that for the product categories under review, South Africa’s exports are adequately explained by the independent variables in the models. The speed of convergence test also indicates that there is untapped potential for South Africa’s exports in the Zimbabwean markets for many product categories.
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