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The Role of Price and cost Competitiveness in Apparel Exports, post MFA: A Review

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  • Meenu Tiwari
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    Abstract

    Global outsourcing, technical change, and falling barriers to trade worldwide have transformed the structure of production and global competition in the textile and apparel industry. This sector has experienced intense fragmentation in the last two decades,much of which was driven by the Multifibre Arrangement (MFA). This review shows that post-MFA, firms today face altered conditions of competition that are pushing them to compete on the basis of factors other than price and cost competitiveness. The paper also argues that the attribution of China’s remarkable export performance in textiles and apparel to its low unit costs and large scales of production is, in part, a misreading of the China story.

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    Bibliographic Info

    Paper provided by eSocialSciences in its series Working Papers with number id:485.

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    Date of creation: Apr 2006
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    Handle: RePEc:ess:wpaper:id:485

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    Keywords: textile exports; apparel exports; Multi Fibre Arrangement; MFA; post-MFA; china; cost competitiveness; scale of production; Economics; International Trade;

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    1. Harrison, Glenn W & Rutherford, Thomas F & Tarr, David G, 1997. "Quantifying the Uruguay Round," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(444), pages 1405-30, September.
    2. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, Elsevier, vol. 48(1), pages 37-70, June.
    3. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
    4. Kala Krishna & Refik Erzan & Ling Hui Tan, 1991. "Rent Sharing in the Multi-Fibre Arrangement: Theory and Evidence from US Apparel Imports from Hong Kong," NBER Working Papers 3673, National Bureau of Economic Research, Inc.
    5. Grossman, Sanford J & Hart, Oliver D, 1983. "Implicit Contracts under Asymmetric Information," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 98(3), pages 123-56, Supplemen.
    6. Carolyn Evans & James Harrigan, 2003. "Distance, time, and specialization," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 766, Board of Governors of the Federal Reserve System (U.S.).
    7. Kenneth A. Reinert, 1993. "Textile and Apparel Protection in the United States: A General Equilibrium Analysis," The World Economy, Wiley Blackwell, vol. 16(3), pages 359-376, 05.
    8. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, Elsevier, vol. 27(2), pages 253-279, August.
    9. Gibbon, Peter, 2001. "Upgrading Primary Production: A Global Commodity Chain Approach," World Development, Elsevier, Elsevier, vol. 29(2), pages 345-363, February.
    10. Kenneth Hanson & Kenneth Reinert, 1997. "The Distributional Effects of U.S. Textile and Apparel Protection," International Economic Journal, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(3), pages 1-12.
    11. Charles Sabel & Sanjay Reddy, 2007. "Learning to Learn: Undoing the Gordian Knot of Development Today," Challenge, M.E. Sharpe, Inc., vol. 50(5), pages 73-92, October.
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