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What Explains the International Location of the Clothing Industry?

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Author Info

  • Tengstam, Sven

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

The clothing sector has been a driver of diversification and growth for countries that have graduated into middle income. Using a partial adjustment panel data model, this study tries to explain the international location of clothing production based on a combination of variables suggested by the Heckscher-Ohlin theory and by New Economic Geography theory. Our Blundell-Bond system estimator results show that closeness to intermediates such as low-cost labor and textile production has a positive effect on clothing production. Factor endowment and closeness to the world market have inversed U-shaped effects. This is expected, because above a certain level several other sectors benefit even more from closeness and factor endowments, driving resources away from the clothing industry.

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File URL: http://hdl.handle.net/2077/9580
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 290.

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Length: 38 pages
Date of creation: 21 Feb 2008
Date of revision:
Handle: RePEc:hhs:gunwpe:0290

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Related research

Keywords: Clothing Industry; New Economic Geography; Comparative Advantages; Industrial Agglomeration.;

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