Trade Liberalization, Technical Change and Firm Level Restructuring in the South African Automotive Component Sector

This paper examines the interplay between trade liberalization and the processes of learning, technical change and capability development in the South African automotive component sector. Using case studies based on firm level interviews conducted at various points since 1992, it illustrates how the technological capabilities of the industry were shaped by protection, and how this in turn mediated responses to trade liberalization initially via internal restructuring and more recently in the phase of internationalization and growing foreign ownership. In essence, the paper presents a ‘before and after’ picture of firm level responses to liberalization.