South Africa has been integrating into the global economy since the early 1990s through a rapid programme of trade liberalization. Its textile industry—an activity important in manufacturing value-added in most developing countries—illustrates the effects of this policy on firms and their employment and wage payments, which are among the most important channels through which trade shocks affect poverty in an economy. Exporting has been driven by trade liberalization, but the restructuring of firms has involved substantial falls in total textile employment, while production has stagnated. Labour productivity has increased and average real wage payments have risen.
Journal of International Development (2004) 16 (1) 125-139 [DOI: 10.1002/jid.1067]