Competitiveness of the South African citrus fruit industry in the global market and its macroeconomic determinants.

Abstract

Purpose – To assess South Africa’s (SA’s) citrus export competitiveness in the global market and identify its macroeconomic drivers. Design/methodology/approach – The Normalized Revealed Comparative Advantage (NRCA) index is employed to measure export competitiveness. An ARDL-EC model is then estimated to identify the macroeconomic determinants of SA’s citrus export competitiveness. Findings – SA’s citrus export competitiveness declined before the mid-1990s and rose thereafter. On balance, the country improved from the fourth to the second most competitive citrus exporter. A long-run relationship was established between the NRCA scores and the real exchange rate and real GDP per capita growth rate. The export price exerted a positive short-run influence on citrus export competitiveness. The rise in SA’s citrus export competitiveness since the mid-1990s was mainly driven by the rising citrus export price and real exchange rate depreciation. Research limitations/implications – Future research could explore the determinants of SA’s export competitiveness using panel gravity models of bilateral trade flows to isolate the impact of macroeconomic variables and trade restricting/enhancing policies of importing countries. Originality/value – The article employs the NRCA index, which can measure comparative advantage across space and over time. It is the first to econometrically estimate the macroeconomic determinants of citrus export competitiveness in SA. Application of the ARDL-EC framework yields both short- and long-run effects of macroeconomic variables on export competitiveness.