IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper

Slow and steady wins the race : how the garment industry leads industrialization in low-income countries

  • Fukunishi, Takahiro
  • Yamagata, Tatsufumi

This paper investigates how the garment industry escapes this vicious cycle and argues for the validity of labor-intensive industry as a starting point for full-fledged industrialization, even though it might at first seem to be a digression from the path to an innovation-led economy. By examining original firm-level data on garment-producing firms collected in 2002 and 2008 in Bangladesh, Cambodia, Kenya and Madagascar, the following conclusions are drawn: (1) low wages, though still sufficient for poverty reduction, are the main source of competitiveness in low-income countries; (2) after the successful initiation of industrialization causes wages to begin to rise, there is still a possibility for productivity enhancement; and (3) skill bias in technological progress is not yet a major factor, implying that the garment industry is still a labor-intensive industry. In sum, labor-intensive industry should not be discounted as a part of the development strategy of low-income countries.

If 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.

File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1264/1/ARRIDE_Discussion_No.412_fukunishi.pdf
File Function: First version, 2013
Download Restriction: no

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 412.

as
in new window

Length:
Date of creation: Apr 2013
Date of revision:
Publication status: Published in IDE Discussion Paper. No. 412. 2013.4
Handle: RePEc:jet:dpaper:dpaper412
Contact details of provider: Postal:
3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545

Fax: +81-43-299-9726
Web page: http://www.ide.go.jp/
Email:


More information through EDIRC

Order Information: Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
Web: http://www.ide.go.jp/English/Publish/Order Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2005. "The Effects of Technical Change on Labor Market Inequalities," Working Papers 89, Princeton University, Department of Economics, Center for Economic Policy Studies..
  2. Deardorff, A.V., 1998. "Fragmentation in Simple Trade Models," Papers 98-11, Michigan - Center for Research on Economic & Social Theory.
  3. Przemyslaw Kowalski & Margit Molnár, 2009. "Economic Impacts of the Phase-Out in 2005 of Quantitative Restrictions under the Agreement on Textiles and Clothing," OECD Trade Policy Papers 90, OECD Publishing.
  4. Hayami, Yujiro & Ruttan, V W, 1970. "Factor Prices and Technical Change in Agricultural Development: The United States and Japan, 1880-1960," Journal of Political Economy, University of Chicago Press, vol. 78(5), pages 1115-41, Sept.-Oct.
  5. repec:pri:cepsud:113krusell is not listed on IDEAS
  6. Foster, Lucia & Haltiwanger, John C. & Syverson, Chad, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," IZA Discussion Papers 1705, Institute for the Study of Labor (IZA).
  7. Amjad (edited), Rashid, 1981. "The development labour intensive industry in ASEAN countries: an overview," MPRA Paper 38967, University Library of Munich, Germany.
  8. Takahiro FUKUNISHI, 2009. "Has Low Productivity Constrained The Competitiveness Of African Firms? A Comparison Of Kenyan And Bangladeshi Garment Firms," The Developing Economies, Institute of Developing Economies, vol. 47(3), pages 307-339.
  9. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  10. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557.
  11. Gladys Lopez-Acevedo & Raymond Robertson, 2012. "Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement," World Bank Publications, The World Bank, number 13137, April.
  12. Yamagata, Tatsufumi, 2006. "The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development," IDE Discussion Papers 62, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  13. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World
    [A Farewell to Alms: A Brief Economic History of the World]
    ," Introductory Chapters, Princeton University Press.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:jet:dpaper:dpaper412. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie Kobayashi)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.