Impact of international trade on employment in orange industry of South Africa


The purpose of the study is to analyse the long-run and short-run dynamic relations amongst total employment (lnEMPGt), export output (EXPOt) and import output (IMPOt) from 1990 to 2018, by applying a time-series analysis. The study adopts the secondary data for total employment from the Citrus Growers Association of South Africa, while both export and import output were sourced from the Global Trade Atlas. The multivariate cointegration approach is adopted in the study to identify any causal relationships amongst the concerned variables. The chosen optimum lag selection criterion was the Akaike Information Criterion (AIC) due to its association dependence on the log-likelihood ratio. The third lag was selected for the entire analysis. The results from the cointegration test and the Vector Error Correction Model (VECM) suggest a positive long-run effect between total employment and export output, while import output is negatively associated with total employment. The adjustment term of lnEMPGt, EXPOt and IMPOt suggests that the previous year’s errors are corrected for the current year at a convergence speed of 0.002, 1.11 and 25.37 percentage points, respectively. The results of the Granger causality test show that there are bidirectional causality effects between export output and total employment in the long run, while there are no causality effects between import output and total employment. The overall conclusion is that export outputs positively impact employment, while import outputs impact it negatively in the South African orange industry.


South African orange industry; employment, wages; international trade; Johansen cointegration; vector error; correction model

Bongsha, B. (2011). The impact of trade liberalisation on the manufacturing sector in Cameroon. University of North West.
CGA (2019). 2019 Industry Statistics, 2018 Export Season. Hilcrest, KwaZulu Natal. Retrieved June 12th 2020 from:
DAFF (2018). A profile of the South African citrus market value chain, Pretoria, South Africa. Retrieved from:
De Pinto, M., Michaelis, J. (2014). International trade and un employment - the worker-selection effect. Rev. Int. Econ., 22(2), 226–252.
Gujarati, D.N. (2003). Basic econometrics. New York: The McGraw-Hill Companies.
Gujarati, D.N. (2015). Econometrics by example. New York: Palgrave Macmillan.
Idsardi, E.F., Cloete, P.C. (2013). A historical perspective of the link between economic recessions and agricultural trade performance: The case of South Africa’s fruit and wine exports. Agrekon, 52(4), 43–65.
Jain, M., Gupta, H. (2019). A Vector Error Correction Model (VECM) approach to investigate the linear behaviour of stocks , bonds and hedge funds, Moradabad, India. Retrieved from:
Jayanthakumaran, K. (2006). An empirical assessment of the effects of trade on employment in Australia 1989/1990-2000/2001. Econ. Pap., 25(1), 68–82.
Kapuya, T. (2015). The trade effects of technical barriers on South Africa’s orange exports. Agrekon, 54(1), 1–27.
Krugman, P. (1979). Increasing returns, monopolistic competition and international trade. J. Int. Econ., 9(1), 469–479.
Lubinga, M., Phaleng, L. (2018). South African fruit trade flow. National Agricultural Marketing Council, Pretoria, Trade Probe, South Africa (pp. 3–10).
Lubinga, M.H. (2014). The impact of climate change and the european union gsp-scheme on east africa’s horticultural trade. Bloemfontein, South Africa. University of the Free State. Retrieved from:
Mukhtar, T., Rasheed, S. (2010). Testing long run relationship between exports and imports: evidence from Pakistan. J. Econ. Coop. Dev., 31(1), 41–58.
Portella-Carbo, F. (2016). Effects of international trade on domestic employment : an application of a global multi regional input – output supermultiplier model. Econ. Syst. Res., 28(1), 1469–5758.
Porter, M.E. (1990). The Competitive Advantage of Nations. Harvard: Harvard Business School.
Rasiah, R., Hamid, B.A., Seong, W.C.O., Habibullah, M. (2015). Time series analysis of the impact of consumption and energy use of environmental degradation: evidence from Malaysia. Kajian Malay., 33(1), 15–32.
Salvanes, K., Forre, S. (2003). Effects on employment of trade and technical change: evidence from Norway. Economica, 70(1), 293–329.
Sandrey, R., Vink, N. (2007). The deregulation of agricultural markets in South Africa and New Zealand: a comparison. Agrekon, 46(3), 323–350.
Sender, J., Johnston, D. (2004). Searching for a weapon of mass production in rural Africa : unconvincing arguments for land reform. J. Agrar. Change, 4(2), 142–164.
Wooldridge, J. (2013). Introductory econometrics: A modern approach. Michigan State, United States: South-Western Cengage learning.
Zheng, C., Bhowmik, P.K., Sarker, N. (2020). Industry-specific and macroeconomic determinants of non-performing loans: A comparative analysis of ARDL and VECM. Sustainability, 12(1), 1–17.

Published : 2021-07-04

Molepo, N. (2021). Impact of international trade on employment in orange industry of South Africa. Journal of Agribusiness and Rural Development, 60(2), 193-201.

Nkoti Solly Molepo
University of Limpopo  South Africa

CitedBy Crossref

CitedBy Scopus

HTML tutorial

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

This journal permits and encourages authors to post items submitted to the journal on personal websites or institutional repositories both prior to and after publication, while providing bibliographic details that credit, if applicable, its publication in this journal.