A Bacon of Hope? Another Look at the Italian Textile Industry
AbstractDespite increasing competition from newly industrializing countries, Italy’s textile industry has continued to be an important contributor to the domestic economy. Many observers attribute this resilience to the industry’s focus on quality. Here, we take note of that view but also examine production and cost relationships to explore the existence of returns to scale and the interrelationships among inputs to gain additional insights about the future prospects for this industry. The findings are consistent with constant returns to scale and a substitute relationship between all input pairs except for domestic capital and foreign intermediate goods. While the estimated cross elasticity values for the latter input pair suggested complementarity, they were not statistically significant. The results also suggested some increasing flexibility in the labor market, perhaps including informal sector arrangements, greater responsiveness of labor demand to the price of capital, and more international production sharing arrangements. An increasing elasticity over time of the demands for domestic capital and domestic intermediate goods with respect to the price of foreign substitutes was also observed. Maintaining the Italian textile industry’s reputation for outstanding quality may be an important survival strategy for some products; international production sharing may be necessary to maintain competitiveness for others.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by College of Business, University of Texas at San Antonio in its series Working Papers with number 0060.
Length: 22 pages
Date of creation:
Date of revision:
Italy; Textile Industry;
Find related papers by JEL classification:
- D2 - Microeconomics - - Production and Organizations
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L - Industrial Organization
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eddie Salinas).
If references are entirely missing, you can add them using this form.