Portuguese Textiles and Apparel Industry: Assessing the Effect of International Trade on Employment and Green Employment

This study examines the impact of international trade activities on employment in the Portuguese textiles and apparel industry from 2010 to 2017. It finds evidence that imports and exports have a persistent, negative, and significant effect on overall job creation, with this impact intensifying over the long-run. Additionally, the increasing elasticity of substitution between imports and exports indicates that private companies of this industry have benefited from a win–win situation characterised by higher production volumes and lower marginal costs. By applying an unsupervised machine-learning method, followed by a discrete choice analysis to infer the firm-level propensity to possess green capital, we identify a phenomenon termed the green international trade paradox . This study also reveals that international trade activities positively influence green job creation in firms lacking green capital if and only if these players are engaged in international markets while negatively affecting firms already endowed with green technologies. As such, empirical results suggest that the export-oriented economic model followed over the last decade by the Portuguese textiles and apparel industry has not necessarily generated new domestic employment opportunities but has significantly altered the magnitude and profile of skill requirements that employers seek to identify in new workforce hires.