Abstract
Amongst developed countries, Italy is unusual in that it has maintained a specialisation in traditional industries such as textiles and clothing (TCI). Explanations of Italy’s unusual industrial profile mainly emphasise the role of endogenous economic and cultural resources. Globalisation in the 1990s and 2000s saw slow growth and a significant decline of these formerly resilient industries. Analyses of trade and unit value data support accounts of the lateness of the Italian TCI’s movement in the direction of Outward Processing Traffic (OPT) and the subsequent rise of a pan-Euro-Mediterranean system. More recently, however, this system has declined as a result of new competitive challenges from China and other emerging economies that have eroded the position of Italian enterprises on export and domestic markets and adversely affected their Euro-Mediterranean suppliers. As district and value-chain theories show, the geography of industrial activities is a result of enterprise strategies and the environment in which they operate. To embrace recent trends these theories must, however, be extended to give greater weight to exchange rate, trade, market, demand-side and related institutional issues.
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