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Broken Chain? AGOA and Foreign Direct Investment in the Kenyan Clothing Industry

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  • Phelps, Nicholas A.
  • Stillwell, John C.H.
  • Wanjiru, Roseline
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    Abstract

    Summary Drawing upon survey and interview research covering 23 of an estimated total of 35 clothing manufacturing establishments operating in Kenya as well as interviews with the policy community, this paper examines the local economic development impacts associated with the recent AGOA-prompted re-birth of the clothing industry in Kenya just after its recent high watermark in 2003. It provides evidence of the characteristics of these manufacturing establishments as well as evidence of the multiple and interconnected failures on the part of Government, parent companies, agents, and customers to promote the longer-term sustainability of the industry. As such, it provides further case study evidence of Africa's uniquely problematic incorporation into global commodity chains.

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    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 37 (2009)
    Issue (Month): 2 (February)
    Pages: 314-325

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    Handle: RePEc:eee:wdevel:v:37:y:2009:i:2:p:314-325

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    Web page: http://www.elsevier.com/locate/worlddev

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    Keywords: clothing industry Kenya AGOA FDI economic development;

    References

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    1. Himbara, David, 1994. "The failed Africanization of commerce and industry in Kenya," World Development, Elsevier, vol. 22(3), pages 469-482, March.
    2. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
    3. Sanjaya Lall, 2005. "FDI, AGOA and Manufactured Exports by a Landlocked, Least Developed African Economy: Lesotho," Journal of Development Studies, Taylor & Francis Journals, vol. 41(6), pages 998-1022.
    4. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    5. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-74, February.
    6. Rugman, Alan & D'Cruz, Joseph, 1997. "The theory of the flagship firm," European Management Journal, Elsevier, vol. 15(4), pages 403-412, August.
    7. Helleiner, Gerald K, 1973. "Manufactured Exports from Less-Developed Countries and Multinational Firms," Economic Journal, Royal Economic Society, vol. 83(329), pages 21-47, March.
    8. Dunning, John H, 1979. "Explaining Changing Patterns of International Production: In Defence of the Eclectic Theory," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 269-95, November.
    9. Bair, Jennifer & Gereffi, Gary, 2001. "Local Clusters in Global Chains: The Causes and Consequences of Export Dynamism in Torreon's Blue Jeans Industry," World Development, Elsevier, vol. 29(11), pages 1885-1903, November.
    10. Gibbon, Peter, 2001. "Upgrading Primary Production: A Global Commodity Chain Approach," World Development, Elsevier, vol. 29(2), pages 345-363, February.
    11. Elkins, Zachary & Guzman, Andrew T. & Simmons, Beth A., 2006. "Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960 2000," International Organization, Cambridge University Press, vol. 60(04), pages 811-846, October.
    12. Vernon, Raymond, 1979. "The Product Cycle Hypothesis in a New International Environment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 255-67, November.
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    Cited by:
    1. Lorenzo Rotunno & Pierre-Louis Vezina & Zheng Wang, 2012. "The rise and fall of (Chinese) African apparel exports," CSAE Working Paper Series 2012-12, Centre for the Study of African Economies, University of Oxford.
    2. Morris, Mike & Staritz, Cornelia, 2014. "Industrialization Trajectories in Madagascar’s Export Apparel Industry: Ownership, Embeddedness, Markets, and Upgrading," World Development, Elsevier, vol. 56(C), pages 243-257.
    3. Peerally, Jahan Ara & Cantwell, John A, 2012. "Changes in Trade Policies and the Heterogeneity of Domestic and Multinational Firms’ Strategic Response: The Effects on Firm-Level Capabilities," World Development, Elsevier, vol. 40(3), pages 469-485.
    4. Staritz, Cornelia & Morris, Mike, 2013. "Local embeddedness and economic and social upgrading in Madagascar's export apparel industry," Working Papers 38, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    5. Staritz, Cornelia & Morris, Mike, 2012. "Local embeddedness, upgrading, and skill development: Global value chains and foreign direct investment in Lesotho's apparel industry," Working Papers 32, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    6. Cornelia Staritz, 2011. "Making the Cut? Low-Income Countries and the Global Clothing Value Chain in a Post-Quota and Post-Crisis World," World Bank Publications, The World Bank, number 2547, July.

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