Total Factor Productivity in South African Manufacturing Firms

Abstract We use firm‐level data for the period 2010‐2013 to estimate total factor productivity in the South African manufacturing sector. We examine differences in the level and growth of productivity across manufacturing subsectors and examine the heterogeneity in productivity levels within sectors. We find that productivity grew in most subsectors but that there is heterogeneity across subsectors in the pace of growth. We find that firm size is positively correlated with productivity and its growth rate. We also find that there is a productivity premium associated with engaging in R&D and international trade.