Abstract
ABSTRACT A partial equilibrium trade model is used to test the role of vertical linkages and home market effects on the pattern of U.S. apparel trade, while controlling for trade costs and comparative advantage. Input output data is used to investigate the significance of linkages between the apparel and textile industries. Industrial production data is used to provide industry specific estimates of the home market effect. We find strong evidence of home market effects that increase with the phasing out of apparel quotas. Strong linkages between the apparel and textile industries in the exporting country are positively correlated with apparel exports.
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