Industrial policy and economic growth

Abstract

Despite widespread and growing adoption of industrial policy across the world, sound empirical evidence is still limited and typically skewed towards high-income settings. I propose to fill this gap by examining the automotive industry, one of the largest sectors in global manufacturing and often viewed as a key driver of industrial growth. In this context, South Africa offers a natural setting to explore the impact of industrial policy due to the significant growth in its automotive industry and the simultaneous rollout of targeted industrial policies over the last three decades. I focus in particular on two industrial policy interventions: the Automotive Production Development Program (APDP) introduced in 2013, and the South African Automotive Masterplan (SAAM) introduced in 2020. The project seeks to investigate the impact of these policies on: i) local value added and productivity; ii) investment, technology adoption, and skill upgrading; iii) volume, value, and composition of exports; iv) volume, value, and composition of imports; and v) side effects on local component manufacturers. The results are expected to contribute to a growing body of empirical literature on industrial policy and to inform the policy debate on its potential role for low- and middle-income countries.

Researcher

Matteo Filippi, PhD Candidate in Economics, University of Zurich