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The Quality of Production of Textiles and Clothing and the Completion of the Internal Market


  • Faini, Riccardo
  • Heimler, Alberto


We evaluate the quality differentials between developing and developed countries' textiles and clothing exports. Theoretical analyses often conclude that protection leads to quality upgrading (downgrading) of imports (domestic production), while recent empirical work suggests that it shifts the quality of foreign and domestic goods in the same direction. Using a simple duopoly model, in which average production costs decline more rapidly (or increase less sharply) for higher quality goods, we find that protection enables domestic producers to increase their share of the higher quality market segment. We compute multilateral Fisher Ideal price and quality indices for imports into the four major EC countries and find that quality differences explain about half the differences among the unit values of exporters to each market. There are also substantial quality differentials between developed and developing countries for textiles, but not for clothing products. Finally, even after controlling for quality effects, we find large price differentials across EC markets, particularly for developing countries' exports, which the completion of the internal market in 1992 should help to compress.

Suggested Citation

  • Faini, Riccardo & Heimler, Alberto, 1991. "The Quality of Production of Textiles and Clothing and the Completion of the Internal Market," CEPR Discussion Papers 508, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:508

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    Cited by:

    1. repec:kap:iaecre:v:6:y:2000:i:4:p:619-632 is not listed on IDEAS
    2. Ingeborg Menzler-Hokkanen & Rolf Langhammer, 1994. "Product and country substitution in imports: An empirical comparison of theoretical concepts," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(2), pages 309-328, June.
    3. Riccardo Faini & Jaime Melo & Wendy Takacs, 1995. "A Primer on the MFA Maze," The World Economy, Wiley Blackwell, vol. 18(1), pages 113-135, January.
    4. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
    5. Menzler-Hokkanen, Ingeborg & Spinanger, Dean & Langhammer, Rolf J., 1992. "Identifying sources of unit value dynamics in international trade," Kiel Working Papers 551, Kiel Institute for the World Economy (IfW).
    6. Inmaculada Martínez-Zarzoso & Celestino Burguet, 2000. "Measurement of export prices and changes in product quality," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 619-632, November.

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    Protection; Quality; Textiles and Clothing;


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