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Adjustment and Performance of the Textile and Clothing Industry in the Czech Republic, Poland and Portugal

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  • Benacek, Vladimir
  • Caban, Wieslaw
  • Corado, Cristina
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    Abstract

    We discuss the restructuring of the textile and clothing industry in two East European countries. The paper compares the industry there with that in Portugal. Even though this study is only concerned with one particular industry, it reveals how wide and intensive the problems of transition are. The case studies discussed illustrate many of these difficulties. Former state-owned enterprises are reorienting sales to Western markets under the pressure of competition from a new and expanding private sector that sells imported products. Trade among former Comecon countries remains difficult in spite of the recent free trade agreement between Visegrád countries. The Czech Republic and Poland currently have a more dualistic market structure than Portugal: very large firms alongside a very fragmented private sector. We assess the contribution of the new, private firms in the Czech Republic to find that production and employment in the clothing industry performed quite well, in contrast with the former state-owned sector. The performance of and outlook for former state-owned enterprises are dismal, especially in textiles. In clothing, inward-processing trade has helped large firms. Using a simple analytical framework we show that the former Comecon countries were never as good at buying as the West is now. The changes in domestic demand appear to be the main explanation for the fall in output in the earlier years of economic transformation. In clothing, however, inward-processing operations are dampening the problems of transition.

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    Bibliographic Info

    Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1260.

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    Date of creation: Nov 1995
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    Handle: RePEc:cpr:ceprdp:1260

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    Related research

    Keywords: Industry Studies of Trade; Market Structure; Production; Textiles and Clothing;

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