Investigating the comparative and competitive advantage of the South African clothing and textile industry

M.Com. (Development Economics)The aim of this research is to determine the comparative and competitive advantage levels of the South African clothing and textile industry relative to other emerging markets. The research employs both the Revealed Comparative Advantage (RCA) model and the panel data econometric model in order to assess both the comparative and competitive advantages of the South African clothing and textile industry. The RCA model includes export data from 1990 to 2013 for 18 selected emerging markets. A country would possess a comparative advantage if its RCA index is greater than unity. The findings from the RCA index analysis reveal that South Africa has comparative disadvantages in both the clothing and textile industry. A further RCA analysis was done taking into consideration the sub-industries of the clothing and textile industry. The results show that South Africa is inclined towards comparative advantages only in the sub-industries of synthetic fibres suitable for spinning, and wool and animal hair. The rest of the South African sub-industries reveal a comparative disadvantage in comparison to the other emerging markets. Furthermore, the findings from the RCA index analysis reveal that Asian countries, along with Turkey, are inclined towards a more dominant comparative advantage in comparison to other emerging markets in both the clothing and textile industries and their respective sub-industries..