Research Article
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Year 2019, , 20 - 35, 31.07.2019
https://doi.org/10.34109/ijefs.201911202

Abstract

References

  • Banerjee, A., Dolado, J. & Mestre, R. (1998). Error‐correction mechanism tests for cointegration in a single‐equation framework. Journal of Time Series Analysis, 19(3), 267-283.
  • Belle, D. & Bullock, H.E. (2011). SPSSI Policy Statement: The psychological consequences of unemployment. http://www.spssi.org/index.cfm. Accessed 2017/08/10.
  • Binns, T. & Nel, E.T. (2002). Tourism as a local development strategy in South Africa. The Geographical Journal, 168(3), 235-247.
  • Borooah, V. (2003). Market failure: An economic analysis of its causes and consequences. https://www.researchgate.net/publication/266350206. Accessed 2017/02/15.
  • Boulhol, H., De Serres, A. & Molnar, M. (2008). The contribution of economic geography to GDP per capita. https://scholar.google.co.za/scholar?hl=en&as_sdt=0%2C5&q=Boulhol. Accessed 2018/07/03.
  • Breitung, J. (2000). The local power of some unit root tests for panel data. Advances in Econometrics, 15, 161-178.
  • Capricorn District Municipality. (2018). Capricorn District Municipality IDP. www.cdm.org.za/attachments/.../Draft%202016-17%20-%202020-21%20IDPBudget. Accessed 2018/06/07.
  • Dang, G. & Pheng, L. (2014). Theories of economic development. Infrastructure Investments in Developing Economies, 1(3), 11-26.
  • Garidzirai, R. (2017). Analysis of key sectors contributing to local economic development in the Capricorn region, Limpopo Province. PhD thesis. Vanderbijlpark, South Africa: North West University.
  • Giordani, P.E. (2012). Food prices and the multiplier effect of export policy. World Trade Organization economic research and statistics division. Staff Working Paper ERSD-2012-08. Economic Research Division, WTO; Columbia Business School - Economics Department; International Monetary Fund (IMF).
  • Global Insight. (2017). Global Insight Regional Explorer data base. Pretoria: IHS Markit.
  • Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. Econometric Journal, 3, 148–161.
  • Heckman, J.J., Ichimura, H. & Todd, P. (1998). Matching as an econometric evaluation estimator. The Review of Economic Studies, 65(2), 261-294.
  • Hsiao, C. (2006). Panel data analysis: Advantages and challenges. Sociedad de Estad´ıstica e Investigaci´on Operativa, 1–63.
  • Kirsten, J.G., Van Zyl, J. & Vink, N. (1998). The agricultural democratization of South Africa. 1st ed. Cape Town: IPA Publishers.
  • Krongkaew, M. (2016). Thailand's industrialization and its consequences. www.palgrave.com/us/book/9780333625194. Accessed 2017/02/24.
  • Levin, A., Lin, F. & Chu, C. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108, 1-24.
  • Machaka, E.S. (2012). Local economic development (LED) challenges facing the local government in the Limpopo Province: The case of Motumo trading post in the Molemole local municipality of the Capricorn district municipality. (PhD Thesis-PhD). University of Limpopo.
  • Mbeba, R.D. (2005). An assessment of the impact of Local Economic Development on urban poverty alleviation: The case of Buffalo City Metropolitan. (PhD Thesis) Durban: University of KwaZulu-Natal.
  • Meyer, D.F. (2016). Formulation and testing of a local economic development potential assessment tool. Paper presented at the 13th International Economic and Social Development Conference organized by the ESD Organization, 14 to 16 April, Barcelona, Spain.
  • Mogalakwena Local Municipality. (2006). Local economic development strategy. http://www.mogalakwena.gov.za/mogalakwenaadmin/pages/sites/mogalakwena/documents.pdf. Accessed 2018/06/12.
  • Molomole Local Municipality. (2006). Molemole land use scheme. http://www.molemole.gov.za/docs/framework/Molemole%20Spatial%20Develop ment%20Framework,%202013.pdf. Accessed 2018/06/07.
  • Mongale, I.P. (2012). The financial crisis and household savings in South Africa: An econometric analysis. (Thesis-PhD.) Mafikeng: North-West University.
  • Monsted, M. (1974). Perroux’s theory of growth pole and development pole: A critique. Antipode, 6(2), 106-113.
  • Musakwa, W. (2008). Local economic development as a poverty alleviation tool: A case study on the urban renewal program in KwaMashu. (MA Dissertation). Durban: University of KwaZulu-Natal.
  • Maddala, G.S. & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61, 631- 652.
  • Nel, E.T. (2001). Local economic development: A review and assessment of its current status in South Africa. Urban Studies, 38(7), 1003-1024.
  • Nel, E.T. & Binns, T. (2003). Putting ‘developmental local government’ into practice: The experience of South Africa’s towns and cities. Urban Forum, 14, 165-184.
  • Nghonyama, M.G. (2011). The sustainability of local economic development projects in Thulamela Municipality in the Vhembe District of the Limpopo Province. (MA Dissertation) Mankweng: University of Limpopo.
  • Notre Europe. (2011). Cohesion policy support for local development: Best practice and future policy options. Final report. https://blogs2.uef.fi/relocal/wpcontent/uploads/sites/8/2017/01.pdf. Accessed 2018/06/08.
  • Pedrana, M. (2013). Local economic development policies and tourism: An approach to sustainability and culture. Regional Science Enquiry Journal, 5(1), 91-99.
  • Perasan, M.H. & Shin, Y. (1998). An autoregressive distributed-lag modelling approach to cointegration analysis. Econometric Society Monographs, 31, 371- 413.
  • Perroux, F. (1955). A note on growth poles. Growth and Change, 5(2), 43-49.
  • Pike, A., Tomaney, J. & Rodriguez-Pose, A. (2006). Local and Regional Development. London: Routledge.
  • Republic of South Africa. (1996). Growth, employment and redistribution. www.polity.org.za/govdocs/plicy/growth.html. Accessed 2017/03/16.
  • Rives, J.M. & Heaney, M.T. (1995). Infrastructure and local economic development. Regional Science Perspective, 25(1), 58-73.
  • Rodríguez-Pose, A. (2001). The role of the ILO in implementing local economic development strategies in a globalized world http://learning.itcilo.it/entdev/LED/pub/Eng/Precourse_readings/Rodriguez_Pose_ 2001.pdf. Accessed 2018/04/25.
  • Seduma, M.P. (2011). The impact of local economic development on the livelihood of communities in Ba-Phalaborwa municipality, Mopani, Limpopo province, South Africa: (MA Dissertation), University of Limpopo.
  • Sloman, J. (1994). Economics. 2nd ed. Hertfordshire: Harvester Wheatsheaf.
  • Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. Oxford: Clarendon Press.
  • South Africa Local Government Association (SALGA). (2010). Key issues in local economic development in South Africa and a potential role for SALGA. https://www.salga.org.za/Documents/.pdf. Accessed 2018/06/09.
  • Statistics South Africa. (2018). Gross domestic product. Statistics South Africa, Pretoria: Government Printer.
  • Stellenbosch Local Municipality. (2008). Investment incentive and retention policy framework. Cape Town: Urban-Econ. https://www.stellenbosch.gov.za/documents/socio-economic-data/1723- investment-incentive-and-retention-policy-framework-30-june-2014/file. Accessed 2018/06/19.
  • Todaro, M. & Smith, S.C. (2006). Economic development. 9th ed. London: Addison-Wesley.
  • Triegaardt, J.D. (2014). Assessing local economic development and social welfare benefits in a globalised context. Web access: www.dbsa.org/Research/Documents/Assessing%20local. Accessed 2017/09/12.
  • Trousdale, W. (2005). Promoting local economic development through strategic planning: The local economic development series, Volumes 1 to 5. Nairobi. Kenya. UN-Habitat.
  • Valdés, A. & Foster, G. (2005). Making the labour market a way out of rural poverty Rural and agricultural labour markets in Latin America and the Caribbean. Background paper for the World Development Report. https://scholar.google.co.za/scholar?hl=en&as_sdt=0%2C5&q=Vald%C3%A9s% 2C+A.+%26+Foster%2C+G.+%282005%29. Accessed 2017/10/12.
  • Van Rooyen, J. (1997). Challenges and roles for agriculture in the Southern African region. Agricultural Economics, 36(2), 37-41.
  • Van Rooyen, E. (2007). Facilitating sustainable rural development. The quest for sustainable development. Cape Town: Juta.
  • Victor, O. 2010. The construction industry and its linkages to the Ghanaian economy-polices to improve the sector’s performance. International Journal of Development and Economic Sustainability, 1(1), 555-576.
  • World Bank. (2005). New report calls for urgent action to cut Global poverty and win better development results for poor countries. http://go.worldbank.org/. Accessed 2017/06/05.
  • World Bank. (2015). Local Economic Development: Quick Reference, Urban Development Division. Washington DC: The World Bank.
  • World Bank. (2016). Doing Business: Economic Profile 2016 South Africa, Washington DC: The World Bank. https://openknowledge.worldbank.org/handle/10986/23404. Accessed 2017/07/10.

THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA

Year 2019, , 20 - 35, 31.07.2019
https://doi.org/10.34109/ijefs.201911202

Abstract

The birth of democracy in South Africa in 1994 guided the introduction of local
economic development (LED) to improve local and regional economies.
Accordingly, the objective of this study was to analyse the impact of key
economic sectors on LED in the Capricorn District Municipality over the period
1996 to 2016. The study also included the development of a LED index for
measurement that could contribute to the diverse literature on Development
Economics. The methodology included the development of an index to measure
LED and also an econometric analysis of the impact of economic sectors on the
LED index. The study employed a panel autoregressive distributed lag (ARDL)
model. A LED index was composed of economic growth, employment and
poverty alleviation. The results show how the productivity of key sectors
influence economic growth, employment and poverty alleviation. It is noteworthy
that the community service, trade, construction, finance and electricity sectors are
positively related to LED. The main economic base sectors, such as agriculture
and manufacturing, surprisingly had less of a positive impact on the local
economy. Specific aspects have a negative impact on economic sectors, and
should be minimized. Thus, the study formulated a strategy for policy
implications such as restructuring of the agricultural, manufacturing and infrastructural development sectors, ensuring capacity of all essential services,
improving production methods, and investment in technical skills development. It
was therefore be concluded that LED is a process and tool in improving local
economic growth, employment and poverty alleviation. In light of this finding,
key sectors need to play a significant role to improve local economic growth and
employment, and alleviate poverty.

References

  • Banerjee, A., Dolado, J. & Mestre, R. (1998). Error‐correction mechanism tests for cointegration in a single‐equation framework. Journal of Time Series Analysis, 19(3), 267-283.
  • Belle, D. & Bullock, H.E. (2011). SPSSI Policy Statement: The psychological consequences of unemployment. http://www.spssi.org/index.cfm. Accessed 2017/08/10.
  • Binns, T. & Nel, E.T. (2002). Tourism as a local development strategy in South Africa. The Geographical Journal, 168(3), 235-247.
  • Borooah, V. (2003). Market failure: An economic analysis of its causes and consequences. https://www.researchgate.net/publication/266350206. Accessed 2017/02/15.
  • Boulhol, H., De Serres, A. & Molnar, M. (2008). The contribution of economic geography to GDP per capita. https://scholar.google.co.za/scholar?hl=en&as_sdt=0%2C5&q=Boulhol. Accessed 2018/07/03.
  • Breitung, J. (2000). The local power of some unit root tests for panel data. Advances in Econometrics, 15, 161-178.
  • Capricorn District Municipality. (2018). Capricorn District Municipality IDP. www.cdm.org.za/attachments/.../Draft%202016-17%20-%202020-21%20IDPBudget. Accessed 2018/06/07.
  • Dang, G. & Pheng, L. (2014). Theories of economic development. Infrastructure Investments in Developing Economies, 1(3), 11-26.
  • Garidzirai, R. (2017). Analysis of key sectors contributing to local economic development in the Capricorn region, Limpopo Province. PhD thesis. Vanderbijlpark, South Africa: North West University.
  • Giordani, P.E. (2012). Food prices and the multiplier effect of export policy. World Trade Organization economic research and statistics division. Staff Working Paper ERSD-2012-08. Economic Research Division, WTO; Columbia Business School - Economics Department; International Monetary Fund (IMF).
  • Global Insight. (2017). Global Insight Regional Explorer data base. Pretoria: IHS Markit.
  • Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. Econometric Journal, 3, 148–161.
  • Heckman, J.J., Ichimura, H. & Todd, P. (1998). Matching as an econometric evaluation estimator. The Review of Economic Studies, 65(2), 261-294.
  • Hsiao, C. (2006). Panel data analysis: Advantages and challenges. Sociedad de Estad´ıstica e Investigaci´on Operativa, 1–63.
  • Kirsten, J.G., Van Zyl, J. & Vink, N. (1998). The agricultural democratization of South Africa. 1st ed. Cape Town: IPA Publishers.
  • Krongkaew, M. (2016). Thailand's industrialization and its consequences. www.palgrave.com/us/book/9780333625194. Accessed 2017/02/24.
  • Levin, A., Lin, F. & Chu, C. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108, 1-24.
  • Machaka, E.S. (2012). Local economic development (LED) challenges facing the local government in the Limpopo Province: The case of Motumo trading post in the Molemole local municipality of the Capricorn district municipality. (PhD Thesis-PhD). University of Limpopo.
  • Mbeba, R.D. (2005). An assessment of the impact of Local Economic Development on urban poverty alleviation: The case of Buffalo City Metropolitan. (PhD Thesis) Durban: University of KwaZulu-Natal.
  • Meyer, D.F. (2016). Formulation and testing of a local economic development potential assessment tool. Paper presented at the 13th International Economic and Social Development Conference organized by the ESD Organization, 14 to 16 April, Barcelona, Spain.
  • Mogalakwena Local Municipality. (2006). Local economic development strategy. http://www.mogalakwena.gov.za/mogalakwenaadmin/pages/sites/mogalakwena/documents.pdf. Accessed 2018/06/12.
  • Molomole Local Municipality. (2006). Molemole land use scheme. http://www.molemole.gov.za/docs/framework/Molemole%20Spatial%20Develop ment%20Framework,%202013.pdf. Accessed 2018/06/07.
  • Mongale, I.P. (2012). The financial crisis and household savings in South Africa: An econometric analysis. (Thesis-PhD.) Mafikeng: North-West University.
  • Monsted, M. (1974). Perroux’s theory of growth pole and development pole: A critique. Antipode, 6(2), 106-113.
  • Musakwa, W. (2008). Local economic development as a poverty alleviation tool: A case study on the urban renewal program in KwaMashu. (MA Dissertation). Durban: University of KwaZulu-Natal.
  • Maddala, G.S. & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61, 631- 652.
  • Nel, E.T. (2001). Local economic development: A review and assessment of its current status in South Africa. Urban Studies, 38(7), 1003-1024.
  • Nel, E.T. & Binns, T. (2003). Putting ‘developmental local government’ into practice: The experience of South Africa’s towns and cities. Urban Forum, 14, 165-184.
  • Nghonyama, M.G. (2011). The sustainability of local economic development projects in Thulamela Municipality in the Vhembe District of the Limpopo Province. (MA Dissertation) Mankweng: University of Limpopo.
  • Notre Europe. (2011). Cohesion policy support for local development: Best practice and future policy options. Final report. https://blogs2.uef.fi/relocal/wpcontent/uploads/sites/8/2017/01.pdf. Accessed 2018/06/08.
  • Pedrana, M. (2013). Local economic development policies and tourism: An approach to sustainability and culture. Regional Science Enquiry Journal, 5(1), 91-99.
  • Perasan, M.H. & Shin, Y. (1998). An autoregressive distributed-lag modelling approach to cointegration analysis. Econometric Society Monographs, 31, 371- 413.
  • Perroux, F. (1955). A note on growth poles. Growth and Change, 5(2), 43-49.
  • Pike, A., Tomaney, J. & Rodriguez-Pose, A. (2006). Local and Regional Development. London: Routledge.
  • Republic of South Africa. (1996). Growth, employment and redistribution. www.polity.org.za/govdocs/plicy/growth.html. Accessed 2017/03/16.
  • Rives, J.M. & Heaney, M.T. (1995). Infrastructure and local economic development. Regional Science Perspective, 25(1), 58-73.
  • Rodríguez-Pose, A. (2001). The role of the ILO in implementing local economic development strategies in a globalized world http://learning.itcilo.it/entdev/LED/pub/Eng/Precourse_readings/Rodriguez_Pose_ 2001.pdf. Accessed 2018/04/25.
  • Seduma, M.P. (2011). The impact of local economic development on the livelihood of communities in Ba-Phalaborwa municipality, Mopani, Limpopo province, South Africa: (MA Dissertation), University of Limpopo.
  • Sloman, J. (1994). Economics. 2nd ed. Hertfordshire: Harvester Wheatsheaf.
  • Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. Oxford: Clarendon Press.
  • South Africa Local Government Association (SALGA). (2010). Key issues in local economic development in South Africa and a potential role for SALGA. https://www.salga.org.za/Documents/.pdf. Accessed 2018/06/09.
  • Statistics South Africa. (2018). Gross domestic product. Statistics South Africa, Pretoria: Government Printer.
  • Stellenbosch Local Municipality. (2008). Investment incentive and retention policy framework. Cape Town: Urban-Econ. https://www.stellenbosch.gov.za/documents/socio-economic-data/1723- investment-incentive-and-retention-policy-framework-30-june-2014/file. Accessed 2018/06/19.
  • Todaro, M. & Smith, S.C. (2006). Economic development. 9th ed. London: Addison-Wesley.
  • Triegaardt, J.D. (2014). Assessing local economic development and social welfare benefits in a globalised context. Web access: www.dbsa.org/Research/Documents/Assessing%20local. Accessed 2017/09/12.
  • Trousdale, W. (2005). Promoting local economic development through strategic planning: The local economic development series, Volumes 1 to 5. Nairobi. Kenya. UN-Habitat.
  • Valdés, A. & Foster, G. (2005). Making the labour market a way out of rural poverty Rural and agricultural labour markets in Latin America and the Caribbean. Background paper for the World Development Report. https://scholar.google.co.za/scholar?hl=en&as_sdt=0%2C5&q=Vald%C3%A9s% 2C+A.+%26+Foster%2C+G.+%282005%29. Accessed 2017/10/12.
  • Van Rooyen, J. (1997). Challenges and roles for agriculture in the Southern African region. Agricultural Economics, 36(2), 37-41.
  • Van Rooyen, E. (2007). Facilitating sustainable rural development. The quest for sustainable development. Cape Town: Juta.
  • Victor, O. 2010. The construction industry and its linkages to the Ghanaian economy-polices to improve the sector’s performance. International Journal of Development and Economic Sustainability, 1(1), 555-576.
  • World Bank. (2005). New report calls for urgent action to cut Global poverty and win better development results for poor countries. http://go.worldbank.org/. Accessed 2017/06/05.
  • World Bank. (2015). Local Economic Development: Quick Reference, Urban Development Division. Washington DC: The World Bank.
  • World Bank. (2016). Doing Business: Economic Profile 2016 South Africa, Washington DC: The World Bank. https://openknowledge.worldbank.org/handle/10986/23404. Accessed 2017/07/10.
There are 53 citations in total.

Details

Primary Language English
Subjects Business Administration
Journal Section Research Article
Authors

Rufaro Garidzirai This is me

Daniel Francois Meyer This is me

Paul Francois Muzindutsi This is me

Publication Date July 31, 2019
Published in Issue Year 2019

Cite

APA Garidzirai, R., Meyer, D. F., & Muzindutsi, P. F. (2019). THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA. International Journal of Economics and Finance Studies, 11(2), 20-35. https://doi.org/10.34109/ijefs.201911202
AMA Garidzirai R, Meyer DF, Muzindutsi PF. THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA. IJEFS. July 2019;11(2):20-35. doi:10.34109/ijefs.201911202
Chicago Garidzirai, Rufaro, Daniel Francois Meyer, and Paul Francois Muzindutsi. “THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA”. International Journal of Economics and Finance Studies 11, no. 2 (July 2019): 20-35. https://doi.org/10.34109/ijefs.201911202.
EndNote Garidzirai R, Meyer DF, Muzindutsi PF (July 1, 2019) THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA. International Journal of Economics and Finance Studies 11 2 20–35.
IEEE R. Garidzirai, D. F. Meyer, and P. F. Muzindutsi, “THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA”, IJEFS, vol. 11, no. 2, pp. 20–35, 2019, doi: 10.34109/ijefs.201911202.
ISNAD Garidzirai, Rufaro et al. “THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA”. International Journal of Economics and Finance Studies 11/2 (July 2019), 20-35. https://doi.org/10.34109/ijefs.201911202.
JAMA Garidzirai R, Meyer DF, Muzindutsi PF. THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA. IJEFS. 2019;11:20–35.
MLA Garidzirai, Rufaro et al. “THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA”. International Journal of Economics and Finance Studies, vol. 11, no. 2, 2019, pp. 20-35, doi:10.34109/ijefs.201911202.
Vancouver Garidzirai R, Meyer DF, Muzindutsi PF. THE IMPACT OF ECONOMIC SECTORS ON LOCAL ECONOMIC DEVELOPMENT (LED): THE CASE OF THE CAPRICORN REGION, LIMPOPO PROVINCE, SOUTH AFRICA. IJEFS. 2019;11(2):20-35.