Abstract:
BACKGROUND : This article examined the performance of South African export-oriented firms
during the coronavirus disease 2019 (COVID-19) pandemic. The study is conducted against
the backdrop of an export sector which has grown in importance since South Africa came
out of economic isolation in the early 1990s, an effect which has been amplified in the last
decade given that the world economy has grown meaningfully faster than the domestic
sector of the South African economy.
OBJECTIVES : Given the importance of the rising importance of the export sector, the performance
of South African exporting firms is considered, given the observed resilience of export-oriented
firms in developed and developing markets. Notably, the impacts of the COVID-19 pandemic
challenged this resilience by disrupting export-oriented firms on the demand side and supply
side in their home and foreign markets, potentially threatening network effects and
diversification benefits, which have been traditional sources of resilience.
METHOD : Drawing on data for 1023 South African firms, regression analysis was used to assess
the impacts of the pandemic on exporting firms relative to non-exporting firms. The study also
considered various heterogeneous aspects of exporting firms to provide further insight on
their resilience, including firm size, firm age, industry of operation and the nature of export
relationships.
RESULTS : Incorporating the above various factors, the study results show that export-oriented
firms were significantly more vulnerable than non-exporting firms to the impacts of the
COVID-19 pandemic.
CONCLUSION : The findings have important implications for policy. First, export-oriented firms
are found to be more vulnerable to disruption than non-exporting firms. This is contrary to
expectations and different to experiences in other markets. This finding highlights the importance
of policy support to the export sector during periods of uncertainty. Second, the export sector’s
contribution to the South African economy has grown meaningfully over the past three decades,
underlining the importance of supporting a sector that experiences heightened vulnerability
when crises strike.
