Abstract
Since the 1990s, the clothing and textile (C&T)-industry has been tremendously affected by changes in technology, trade costs, and the institutional environment. This paper studies the restructuring of C&T-trade from the perspective of Europe’s two most prominent C&T-goods producing countries—Italy and Portugal. We explore these two countries’ situation in a global context and concentrate our analysis to two distinct economic variables, C&T-value added and C&T-labor. Moreover, we contribute to the existing literature by distinguishing between domestically and internationally traded C&T-goods as well as between trade in intermediate and final demand C&T-goods, which enables us to give a more full-fledged picture on restructuring of C&T-trade. We show that international C&T-production became more concentrated between 1995 and 2009. In a further step, we investigate changes with regard to import penetration of C&T-trade, international outsourcing, the distance to final demand for C&T-goods, and another range of country-specific trade patterns. Our main findings reveal that Italy was more oriented toward C&T-production activities which generate high value added, whereas Portugal was less productive and relatively more specialized into the production of labor-intensive C&T-goods. Thus, Portugal was more prone to the rising international pressure from low-wage countries, whereas in Italy restructuring of C&T-trade had comparatively less severe effects.
Highlights
Production processes in recent years have been continuously fragmenting internationally (Jones and Kierzkowski 1990; Johnson and Noguera 2012) leading so to a finer division of labor and a rise in productivity
Discussing the situation observed in European national clothing and textile (C&T)-industries, the High Level Group emphasizes: “[w]hile the Euro-Mediterranean Zone provides the conditions necessary to allow the sector to remain an important contributor to European industrial production, policymakers cannot ignore the fact that a permanent process of restructuring and modernisation will continue to lead to falling employment [and value added] for some years to come.” (European Commission 2004b: 7, emphasis added)
Whereas less than 15 % of global C&T-value-added generation occurred in China and India in 1995, almost two-thirds of global working hours already were concentrated in this regional block
Summary
Production processes in recent years have been continuously fragmenting internationally (Jones and Kierzkowski 1990; Johnson and Noguera 2012) leading so to a finer division of labor and a rise in productivity This increasing “multi-country nature of single products” (Stehrer et al 2011: 1) has been accompanied by the establishment of global value chains (Feenstra and Hanson 1996) and worldwide competition more and more plays out at the level of production activities within industries and at the level of a single commodity, rather than in competitive advantages between industries (Fujita and Thisse 2006, 2013). Discussing the situation observed in European national C&T-industries, the High Level Group emphasizes: “[w]hile the Euro-Mediterranean Zone provides the conditions necessary to allow the sector to remain an important contributor to European industrial production, policymakers cannot ignore the fact that a permanent process of restructuring and modernisation will continue to lead to falling employment [and value added] for some years to come.” (European Commission 2004b: 7, emphasis added)
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