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Clothing and export diversification : still a route to growth for low-income countries ?

  • Brenton, Paul
  • Hoppe, Mombert

Can the clothing sector be a driver of export diversification and growth for today's low-income countries as it was in the past for countries that have graduated into middle income? This paper assesses this issue taking into account key changes to the market for clothing: the emergence of India and especially China as exporting countries; the rise of global production chains; the removal of quotas from the global trading regime but the continued presence of high tariffs and substantial trade preferences; the increasing importance of large buyers in developed countries and their concerns regarding risk and reputation; and the increasing importance of time in defining sourcing decisions. To assess the importance of the factors shaping the global clothing market, the authors estimate a gravity model to explain jointly the propensity to export clothing and the magnitude of exports from developing countries to the E U and US markets. This analysis identifies the quality of governance as an important determinant of sourcing decisions and that there appears to be a general bias against sourcing apparel from African countries, which is only partially overcome by trade preferences.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4343.

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Date of creation: 01 Sep 2007
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Handle: RePEc:wbk:wbrwps:4343
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  1. Carolyn Evans & James Harrigan, 2003. "Distance, time, and specialization," International Finance Discussion Papers 766, Board of Governors of the Federal Reserve System (U.S.).
  2. Habiyaremye, Alexis & Ziesemer, Thomas, 2006. "Absorptive Capacity and Export Diversification in Sub-Saharan African Countries," MERIT Working Papers 030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 441-487, 05.
  4. Hummels, David, 2001. "Time as a Trade Barrier," GTAP Working Papers 1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  5. Richard Chisik, 2010. "Export Industry Policy and Reputational Comparative Advantage," Working Papers 017, Ryerson University, Department of Economics.
  6. Wilson,John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2003. "Trade facilitation and economic development : measuring the impact," Policy Research Working Paper Series 2988, The World Bank.
  7. Naila Kabeer & Simeen Mahmud, 2004. "Globalization, gender and poverty: Bangladeshi women workers in export and local markets," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 93-109.
  8. Cling, Jean-Pierre & Razafindrakoto, Mireille & Roubaud, Francois, 2005. "Export processing zones in Madagascar: a success story under threat?," World Development, Elsevier, vol. 33(5), pages 785-803, May.
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