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Enlargement and the Textiles, Clothing and Footwear Industry
Abstract
The textiles, clothing and footwear (TCF) industry is a labour intensive industry, strongly determined by globalization and easy relocation to low-cost countries. Hence also in the European Union this industry is relatively more important in the low-wage regions of the EU-Southern periphery. With the envisaged enlargement, however, these countries fear a further shift of the sector to Central and Eastern Europe as these countries still have a comparative advantage in terms of low labour costs. The present article investigates whether this fear is justified, looking at three main aspects: first at the position and history of the TCF sector in the European Union and its role in the EU periphery, second at the sector in the Central and Eastern accession countries, and third at gobalization issues. The second aspect is dealt with in great detail, as development trends in the Central and East European countries are important and telling. Much has happened during the 15-year (and more) period between the collapse of communism and the EU membership in this region, most important the integration to the EU by the means of trade, in particular outward processing trade. These developments mainly seem to determine future trends in an enlarged Europe. Overall however, future prospects have to be seen in a global context, strongly influencing the sector via changes in global trade policies. Copyright Blackwell Publishing Ltd 2004.
... By 1999, between 74 and 91 percent of accession countries' exports of textile and clothing and between 58 and 97 percent of their exports of footwear was directed towards the EU with Romania having the highest shares in both industries. On the other hand these countries imported between 65 and 86 percent of their textile and clothing needs and between 50 and 91 percent of their footwear needs from the EU-15, with Bulgaria and Romania having again the biggest share(Hanzl-Weiss 2004). Top 10 clothing suppliers toEU-15 in 2003. ...
... Some state-owned enterprises have been engaged in OPT relationships with Western firms since the end of the 1970s(Chis et al 2004). Foreign investors in the Romanian TCF163 In 1999 unit labor costs in the footwear sector for example in Romania, Bulgaria, Lithuania and Poland were 30-40 percent of the EU level(Hanzl-Weiss 2004). sector subcontracting with Western companies helped the industry survive in times of crisis. ...
... In 2001 Romania was the largest Central and Eastern European exporter of textiles, clothing and footwear(Hanzl-Weiss 2004).165 For Italy, Romania represent the most important trade partner; almost half of all Italian imports of clothing from Eastern Europe come from Romania (Grazziani 1998). ...
After the change of its political and economic system in 1989, Romania opened
its market to foreign investment. However, for most of the 1990s annual foreign direct
investment (FDI) flows remained rather modest. They started to increase significantly
only after 2003.
This study has several objectives. Firstly, it examines the major characteristics of
FDI in Romania (size, mode of entry and industry preference). Secondly, it analyzes the
evolution of FDI flows since 1990 in the context of economic and political transition.
Thirdly, it analyzes the spatial distribution of FDI within Romania. Fourthly, it examines
the geographical origins of foreign investors and the different patterns of investment they
generate in Romania. Fifthly, it investigates the main determinants of FDI. And, sixthly,
it examines the impact of FDI on the local and national economies.
In order to answer these questions, the study uses a combination of research
methods that include archival research, questionnaires and interviews. The study has
found that foreign investments in Romania are polarized into very small and large
enterprises, a common characteristic for all transition countries. Almost 40 percent of all
foreign-owned companies are in the wholesale and retail industries, but investments in
the manufacturing sector represent about 50 percent of the FDI stock.
The study also found that FDI is very unevenly distributed within Romania. More
than half of all foreign-owned companies and over 50 percent of the FDI stock is
concentrated in Bucharest, the capital of Romania. Other regions preferred by foreign
investors are the Northwest, the West and the Center while the Southwest and Northeast
xiv
have attracted the least foreign investment. Two important conclusions could be derived
from these findings. Firstly, physical and cultural distance remain important in
influencing the geographical dynamics of FDI. Secondly, those regions that were already
more developed have attracted more FDI and/or more foreign investors. This has
contributed significantly to the widening development gap between regions.
Characteristics and distribution pattern of FDI are also influenced by the investors’
nationalities, reflecting characteristics from the economic, political, cultural and social
environment of their home countries.
In order to understand the main determinants and impact of FDI in Romania, a
questionnaire was sent to foreign investors in two industries: the automotive industry and
the textile, clothing and footwear (TCF) industry. The questionnaire was followed up by
in-depth interviews. The results of this analysis show that, in these two industries, low
operating costs and the presence of highly educated and skilled labor are the most
important factors in attracting FDI. Proximity to the European Union is also considered
important by foreign investors in both industries. On the other hand, the size, strength and
potential of the Romanian market shows only limited importance for foreign investors
confirming the efficiency-seeking rather than market-seeking character of foreign
investments in these two sectors. The impact of foreign automotive and TCF companies
on local economies is in general limited to providing employment. These foreign-owned
companies have developed limited forward and backward linkages with Romanian
companies.
The findings of this research show many similarities to results from other studies
in Central and Eastern Europe but also some major differences. The dynamics of FDI in
xv
Romania and other Central and Eastern European countries illustrate the importance of
history (path dependence). Characteristics and patterns of FDI in Central and Eastern
Europe during the transition years were determined by the different legacies of state
socialism together with specific relations between state, economy and society. Another
important conclusion of this study is that, in the absence of significant political and
economic reforms, FDI is not a solution for jump-starting economic development in a
transition country. Rather than foreign investments determining economic transformation,
political and economic transformation motivates foreign companies to invest in that
country.
In the future, the study would benefit considerably from broadening the scope of
the research to include other economic sectors. Also, on January 1, 2007, Romania joined
the European Union as its 27th member state. Another study may be necessary in the near
future to capture changes in the characteristics and patterns of FDI in Romania following
accession to the European Union.
... Another challenge was the recent integration of relatively low-wage central and eastern European Countries, especially Bulgaria and Romania in 2007, into the European Union (EU). For example, Hanzl-Weiß (2004) stated that in 2001, the nominal monthly wage in the textile and clothing industry in most of the countries expected to join the European Union was between 15 and 25% of the EU average, while those in Bulgaria and Romania were only 6 and 9%, respectively, of that average. However, the situation with respect to Portugal was less extreme than for some EU countries, as the wage rate for the Portuguese industry was only 45% of the EU average (Hanzl-Weiβ, 2004, 940;Amador and Opromolla 2009, 146). ...
... However, none of the mean cross price elasticities were statistically significantly less than zero. 13 See, for example(ACTE 2015;Binlot 2015;Khalip 2012; Fashionating World, 2017;Hanzl-Weiß 2004;Serra, Pointon, and Abdou 2012). ...
The Portuguese textile and clothing industry thrived after 1960, when Portugal joined the European Free Trade Association, and it has been an important industry in Portugal in terms of value added, employment, and exports. Nevertheless, the industry has experienced significant challenges with the final integration of the apparel and textile industry into GATT on 1 January 2005, as well as the admission of relatively low-wage Bulgaria and Romania into the European Union in 2007. This paper describes recent trends in the industry between 1995 and 2016, including a substantial decrease in output after 2005 and recovery in recent years. In addition, a translog cost function is used to examine the existence of economies of scale, the relationships among inputs, and the effects of the 2005 GATT entry on the industry’s costs. The findings include strong evidence of economies of scale, consistent with the many small and mid-sized enterprises in the Portuguese textile and clothing industry. The results are also consistent with capital and labour being complementary inputs, while other input pairs are substitutes. The entry into GATT may have had a negative impact on cost, though the evidence for that effect is weak.
... Another challenge was the recent integration of relatively low-wage central and eastern European Countries, especially Bulgaria and Romania in 2007, into the European Union (EU). For example, Hanzl-Weiß (2004) stated that in 2001, the nominal monthly wage in the textile and clothing industry in most of the countries expected to join the European Union was between 15 and 25% of the EU average, while those in Bulgaria and Romania were only 6 and 9%, respectively, of that average. However, the situation with respect to Portugal was less extreme than for some EU countries, as the wage rate for the Portuguese industry was only 45% of the EU average (Hanzl-Weiβ, 2004, 940;Amador and Opromolla 2009, 146). ...
... However, none of the mean cross price elasticities were statistically significantly less than zero. 13 See, for example(ACTE 2015;Binlot 2015;Khalip 2012; Fashionating World, 2017;Hanzl-Weiß 2004;Serra, Pointon, and Abdou 2012). ...
The full integration of the textile industry into GATT, which with some exceptions occurred on January 1, 2005, is likely to greatly impact the global textile and apparel industries. In particular,one prediction is that the South African industries are likely to be "decimated." The actual effect on these industries in an individual country will depend at least partly on the ability to take advantage of economies of scale and to be internationally competitive. In an endeavor to gain more insights into the future of these industries in South Africa, this study uses a cost function to investigate the presence of scale economies and the nature of input interrelationships. The findings include statistically significant economies of scale present in both industries and cross price elasticity estimates indicating that most inputs are substitutes for one another. The first result offers an opportunity to reduce unit costs, if these industries can grow their markets. However, lower prices on imported intermediate goods will likely decrease the demand for domestic inputs. The cross price elasticities of demand are relatively low in some cases, consistent with domestic input market rigidities and international trade restrictions. More recent data might bring findings of higher cross elasticities in the new international environment.
... A hagyományos élőmunka-igényes könnyűipar vesztese a tényezőintenzitási létra mentén feljebb lépő, újraiparosodó kelet-közép-európai országok gazdasági szerkezetváltásának. Különösen jellemző e tendencia az ezredforduló után, amikor az iparág telephelyválasztási lehetőségei a kereskedelem liberalizációjával, valamint a távolságok legyőzésének csökkenő költségeivel globális szinten és Európában is kiszélesedtek (Dicken 2011, Hanzl-Weiß 2004, Kalantaridis et al. 2008, Roukova et al. 2008. A korábbi regionális termelési rendszerek globálisan optimalizált termelési hálózatoknak adják át a helyüket, ahol a fogyasztási cikkek legtöbbjének gyártása a tömeggyártáshoz kedvező költség-képesség arányokat és méretgazdaságossági előnyöket is felmutató Kelet-és Délkelet-Ázsiába összpontosul. ...
Körülbelül egy évtized kutatásait összegző és kiegészítő, a magyar gazdaság nemzetközi termelési hálózatokba kapcsolódását az autóipar példáján elemző habilitációs értekezésemet a globális áru- és értékláncok, illetve a globális termelési hálózatok párhuzamosan fejlődő, egymásra is számottevő hatást gyakorló, mezoökonómiai jellegű, relacionális szemléletet képviselő elméleteire építettem. Az elméleti fejezetben összefoglalt gondolatok alapján az alábbi kutatási kérdéseket fogalmaztam meg értekezésemben:
1. Miként helyezhető el a magyarországi autóipar az európai (makro)regionális termelési rendszerben? Kijelenthető-e, hogy hazánk autóipara egy jelentőségében növekvő és mindinkább „integrálódó” periféria része, miközben egy alapvetően Németország felé gravitáló rendszerben mind szorosabb kapcsolatok fűzik a szomszédos országokhoz?
2. Van-e elmozdulás az iparág kelet-közép-európai beágyazottságú, hagyományosan észak-dunántúli súlypontú hazai földrajzában? Mutatkoznak-e eltérések az autóipar mennyiségi és minőségi szegmenseinek térbeliségében? Mennyire jellemző a kapcsolódó beszállító iparágak földrajzi egybeesése a közúti járműgyártással? Melyek a hazai autóipar régiói?
3. Mennyiben érhetők tetten az autóipar beszállítók növekedésére gyakorolt hatásai távolabb az ipar dinamikusabb szegmenseitől, például az ezredforduló után nagyarányú leépülést mutató hagyományos könnyűipar részét képező bőriparban? Mennyiben jelent perspektívát az autóipari termelési hálózatokba kapcsolódás a hazai bőripar számára?
4. Mennyiben érhetőek tetten az autóipar periférikus területek gazdaságára gyakorolt hatásai az újraiparosodás kevésbé dinamikus színterének számító alföldi kisvárosok gazdaságának szintjén? Van-e mérhető kisugárzása az iparágnak a fő telephelyeknek számító észak-dunántúli és nagyvárosi gazdasági központoktól távolabb eső vidéki térségekben?
5. Van-e abszolút, a referencia gazdaságnak számító Németországhoz képest is kimutatható feljebb lépés a hazai autóiparban? Miben ragadhatók meg az iparág modernizációs hatásai? Jutunk-e előrébb felzárkózás terén az autóipari termelési hálózatokba kapcsolódás által? Melyek az autóipar felzárkózást segítő szerepe mellett és ellen felhozható érvek?
Kutatásaim módszertani szempontból három pillérre épültek. (1) A szakirodalmi vizsgálatok magukba foglalták a kiválasztott elméleti háttér, illetve a kapcsolódó – elsősorban autóipart érintő – empirikus kutatások megismerését. Az autóipar globális térbeli szerveződése, illetve Kelet-Közép-Európa és Magyarország autóipari termelési hálózatokban elfoglalt pozíciója, feljebb lépési mintázatai mellett e termelési hálózatok többszintű helyi beágyazódása is napirendre került. (2) Az empirikus vizsgálatok részben statisztikai adatokon alapulnak: a hazai (KSH) és külföldi (EUROSTAT, ITC) nemzetgazdasági vagy területi hatókörű, iparági és termékcsoport szintű adatok mellett vállalati adatbázisokból (ceginformacio.hu, KSH, IM elektronikus beszámolók) is gyakran merítettem. (3) Elsősorban az iparági és a területi esettanulmány kidolgozása során nagyban támaszkodtam főként félig strukturált interjúkra épülő terepi kutatásokra. Az esettanulmányok szereplőin túl, különböző autóipari cégeknél és iparági szervezeteknél gyűjtött primer tapasztalatok egyéb elemzéseimbe is beépültek.
Értekezésemben tehát – a félperiféria nézőpontjából adódóan – eredendően alulról tekintek az autóipari termelési hálózatok dinamikájára, illetve területi gazdasági-társadalmi hatásaira. E (bottom-up) békaperspektíva ugyanakkor duplán érvényesül az elemzésben, hiszen nem egyszerűen a magyarországi vállalkozások nemzetközi hálózatokban betöltött funkciói, feljebb lépési mintázatai kerülnek terítékre, de – a terepi kutatások nyomán – ezen belül is hangsúlyosan jelenik meg az ágazati és területi periféria autóipari munkamegosztásban játszott szerepe.
... E két körülmény nyomán a hazai könnyűipar mindinkább a nyugati irányú export irányába fordult, de mert versenyképes saját termékek az esetek egy jelentős részében nem álltak rendelkezésre, illetve a saját termékek anyagköltségének finanszírozása komoly kockázatokat hordozott magában, jellemzően az effajta veszélyeket kiiktató, már a szocialista időszakban is szerepet játszó bérmunka-konstrukció vált a működés meghatározó keretévé (Cseh 1997, Cseh et al. 2002, Laki 2005. Nagyban segítette e túlélési stratégiák megvalósíthatóságát a nyugati megrendelők olcsó kelet-közép-európai termeltetési lehetőségek iránti érdeklődése (Hanzl-Weiß 2004, Kalantaridis et al. 2008, Roukova et al. 2008. ...
The Hungarian TCLF sector faced serious challenges after the turn of the Millennium, arised primarily from the growing globalization of the sector and the increasing costs of local production. Due to the changing conditions, it has been crowded out from those (mostly) European production networks, into which it was integrated during the socialist era and which became key determinants of the sector’s survival after the change of regime. The relocation of the production to lower-cost locations resulted in plant closures of some foreign subsidiaries and in the decline of subcontracts of domestic enterprises.
As a consequence, the Hungarian TCLF sector experienced a large fall of production and employment, while its small and medium-sized enterprise-based character has been strengthened. But the different parts of the light industry were hit by the negative effects not to the same extent. The cost-competitor mass production exposed more to the globalization, producing often in the framework of subcontracting, suffered significant loss, while activities organized in regional production networks protected better from the competition of lower-cost locations as well as technological and functional products depending less on labour costs or own products focused on niche markets gained in their
importance. The internal structure of the sector has been changed: the relative ignificance of the textile and leather subsectors, especially the automotive products has been grown, while strategies of own product development and branding (primarily in the clothing and the footwear subsectors) have been clearly appreciated. The environmental upgrading propagated by our project can be interpreted in this context as a tool for the TCLF sector to step into market segments protected by higher entry barriers. The situation described in the Hungarian light industry is typical of other economies in East Central (and Southern) Europe too. However, as characteristic feature of the Hungarian TCLF sector, the preserved relative importance of all four subsectors (textile, clothing, leather and footwear manufacturing) should be emphasized: due to the structural changes, the power relations of these subsectors became more balanced. On the other hand, the increase of factor intensity in the Hungarian light industry lagged behind the dynamics of the most neighbouring economies: based on the apparent labour productivity and the average personnel costs of the textile, the clothing and the footwear subsectors, there are only
Romania and Bulgaria in a worse position within the European Union. The leather industry experienced intersectoral / chain upgrading through the integration into automotive production networks. However, it has a quite asymmetric character (the upgrading in the apparent labour productivity is more spectacular than in the case of the average personnel costs) which demonstrates the exploitation of cost-efficient production possibilities. On the other hand, the subsector is largely dependent on some prominent
foreign subsidiaries embedded into the Hungarian economy only to a limited extent.
The TCLF sector is dominated by the (mostly manual) employment of women. The employers try to compensate the monotonous and demanding work coupling with relatively low wages by different fringe benefits, welfare measurements and flexible working conditions. However, the TCLF professions are not attractive for the young people: with the retirement of older generations – despite the shrinkage of the industry – the lack of labour force has become practically a common problem. The employment of
mothers with small children, pensioners or employees with reduced capacity to work results in a decreased share of full-time workers. The ageing employment structure will further strengthen the labour force supply problems already in the medium term. Despite the needs of upgrading, a significant part of the employers is not really active in the regular training of their employees. The future competitiveness, environmental and social sustainability of the light industry are interconnected: a change in the product and the activity structure (combined with the improved image of the sector) seems to be simultaneously the prerequisite and the expected consequence of attracting skilled and motivated young labour force. The shrinkage of the light industry went hand in hand with the peripherialization of the sector and its decreasing chance to form critical mass on national or regional level. At the turn of the Millennium there were counties, where 10-15% of the employees and 35-40% of the manufacturing employees were registered in the TCLF sector, but nowadays the light industry doesn’t play an outstanding role within
the local economies even in their most important locations. This means growing disadvantages related to the assertion of interests and melting potential advantages, that can be gained from the networking of the small and medium-sized enterprises. In addition, these conditions are further strengthened by the fact, that there are only few local or regional (institutionalized) organisations of the TCLF sector in Hungary. Because of the general shrinkage and the weakening local concentrations of the light industry,
necessarily arises the demand to unite the whole TCLF sector and to organize it on national level.
... Source: ITC / UN COMTRADE érték-tartalommal bíró termelést. A két időpont összevetésével, a kelet-közép-európai országok globális értékláncokban megfigyelhető, számos szakirodalmi forrás (HanzL-wEiss, d. 2004, HaMar, j. 2006, kaLantaridis, C. et al 2008, CrEstanELLo, p. -tattara, g. 2011, sMitH, a. et al 2014 által alátámasztott feljebb lépését, illetve ruhaipari tömegtermelés piacáról történő fokozatos kiárazódását is láthatjuk. Ez megindokolja egyrészt az iparági foglalkoztatás (és termelés) zsugorodását, másrészt a régióból származó -korábban jelentős -ruhaimport arányának csökkenését. ...
This article focuses on the theories of global commodity chains, value chains, and production networks, offering a meso-economic approach to the understanding of spatial economic inequalities. The first section presents both the similar and different features of the concepts developed by diverse schools of economic geography on the base of increasing empirical experiences, as well as their explanations regarding spatial economic inequalities. The second section interprets the spatial changes and economic effects of the European textile and clothing industry in light of the theoretical background.
... A specialised educational system, which contributed to the human resources foundation of the textile industry, was also maintained in both the secondary and higher education systems [11]. Although it is difficult to find distinct trade data for each country within the Federation, previous research found that in 1989, Yugoslavia was the third largest apparel supplier to the European Union in the world after Hong Kong and Turkey, respectively [5,20]. ...
Due to the paucity of relevant research, little is known about emerging patterns of competitiveness in the textile and apparel (T&A) industry in Balkan countries. Research focused on the Serbian T&A industry after 2006, when the country renewed its independence, is particularly sparse. The purpose of this research is to contribute to a greater understanding of emerging competitiveness and its main determinants in the Serbian T&A industry, in the time period between 2007 and 2019, and in the context of the EU-28 market. Balassa's Revealed Comparative Advantage index and the Trade Performance Index instruments were used to assess export competitiveness, while the key competitiveness determinants were explored drawing on Porter's (1990) theory of the Competitive Advantage of Nations. Findings confirmed that Serbia, a low-income country and not an EU member, retained a distinguished and strong T&A export potential, which confirms that the country is a competitive player in international trade.
... This class of technical textiles involves yarns, fibers and textiles employed as technical elements in the production of clothes, such as waddings, interlinings, sewing threads and insulators. Some of the most recent and highly complicated advances have seen the inclusion of temperature phase changing materials into those insulating merchandise to offer an extra level of control and resistant character to sudden extreme changes of hot or cold temperature [124]. ...
Textile manufacturing has been one of the highest polluting industrial sectors. It represents about one-fifth of worldwide industrial water pollution. It uses a huge number of chemicals, numerous of which are carcinogenic. The textile industry releases many harmful chemicals, such as heavy metals and formaldehyde, into water streams and soil, as well as toxic gases such as suspended particulate matter and sulphur dioxide to air. These hazardous wastes, may cause diseases and severe problems to human health such as respiratory and heart diseases. Pollution caused by the worldwide textile manufacturing units results in unimaginable harm, such as textile polymers, auxiliaries and dyes, to the environment. This review presents a systematic and comprehensive survey of all recently produced high-performance textiles; and will therefore assist a deeper understanding of technical textiles providing a bridge between manufacturer and end-user. Moreover, the achievements in advanced applications of textile material will be extensively studied. Many classes of technical textiles were proved in a variety of applications of different fields. The introductory material- and process-correlated identifications regarding raw materials and their transformation into yarns, fibers and fabrics followed by dyeing, printing, finishing of technical textiles and their further processing will be explored. Thus, the environmental impacts of technical textiles on soil, air and water are discussed.
... These firms employed mainly veneered plywood, which could be easily purchased from large transnational enterprises, while other components made of all-wood or other materials (steel, plastic, glass) were supplied by firms operating within the district or by other firms, Italian or foreign, located in Turkey or in Asia. 29 They needed a complex, 27 On the relative improvement of the comparative advantage of the country within this sector see also Hanz Weiß, 2004. 28 The case of Bonis is particularly interesting: at the time of our interview, the Italian manager was planning to open a plant in China for the production of shoes for its main client, Tommy Hilfiger, exclusively directed to the US market, where consumers pay attention firstly to the price of the product. ...
chapter about internationalization of Italian small firms footwear, garment etc
... As a second world country (Kwon, 2017;Swenson, 1986), Romania has got a couple of characteristics that make it prone for underemployment: market inefficiencies (Dragotă, Mitrică, 2004) and standardized labor procedures. Over the past decade, multinational businesses have increased their foreign direct investments in Romania, relocating their businesses from abroad in order to enjoy the benefits of cheaper labor and lower taxes (Bellak, Leibrecht, 2009;Carstensen, Toubal, 2004;Hanzl-Weiß, 2004;Smith et al., 2002). To reduce operational costs even further, multinationals employed highly standardized labor processes (Petrișor, Cozmiuc, 2016;Marciniak, 2012;Popirlan, 2010) that have transformed working habits into routines (Youngdahl, Ramaswamy, 2008) and which do not necessarily take the educational levels of the employees into account. ...
The purpose of this research was to investigate what effects demographics, in
general, and education, in particular (independent variables x), had on the subjective
underemployment (dependent variable y) of corporate employees in Romania. A Likert
Scale survey questionnaire was administered to 110 employees of multinational
businesses operating in Romania during February and May 2018, asking respondents
to assess to what extent they felt they were underemployed. Answers were then
correlated with the demographic regressors. Perceptions of underemployment were
influenced by education (p = 0.006), though not by other variables such as age or
marital status. Results invalidate the Null Hypothesis and reveal that subjective
underemployment is being manifested on the Romanian corporate labour market,
touching base with previous researches in the area, showing that the higher the level
education, the greater the chances of perceived underemployment to occur. At the same
time, the research addresses ways to combat underemployment, such as increasing
self-esteem levels, re-designing the educational system or life-long learning.
... Az élőmunka-igényes ágazatok kutatása Kelet-Közép-Európa országait sem kerülte el. A posztszocialista átmenet kezdetén a nyugat-európai szereplők előszeretettel választották a régiót telephelyként magasabb minőségi kategóriába tartozó tömegtermékek költséghatékony előállítása céljából (Hanzl-Weiß 2004, Bertram 2005, Scott 2006, Kalantaridis et al. 2008, Roukova et al. 2008. A 2000-es években az érintett országok jelentős részének EU-csatlakozása (közös piac, harmadik országokkal kötött preferenciális megállapodások), Kína tagsága a Kereskedelmi Világszervezetben (World Trade Organization -WTO) és a globális textilkereskedelmet szabályozó kvótarendszer fokozatos kifutása, továbbá a 2008. ...
The article examines the evolution of the labour-intensive textile and clothing as well as leather and footwear industries in Hungary in the theoretical context of global commodity chains / value chains / and production net-works mostly based on statistical data after the turn of the Millennium. It analyses the dynam-ics, structural changes and ways of integration of these sectors into the transnational produc-tion networks in the mirror of productivity, product structure and functions beyond the production. The presented local tendencies are placed into broader international context by comparing the Hungarian indices to the data of other East Central European and Southern and Western European countries. The materi-al demonstrates the mid-term results of a re-search investigating the way in which semiper-iheric regions are integrated into the interna-tional labour division within the labour-intensive industries as well as revealing the future perspectives of these economic activi-ties in East Central Europe.
... Studies have identified clear subordinate relationships between the production sites in the Visegrad countries (but also the CEE region more widely) and the Western European competitors on the European periphery that have used the cheap labour in the East for the low-end part of the production cycle of the textile or clothing industry. 6 This article compares these two sectors and their very different trajectories over time in order to isolate factors that can be attributed to the industrial rise and decline. The automotive and textile industries are defined broadly and in the context of value chains, that is, including production of car parts and industrial vehicles, engines, buses, machines, etc. within the automotive industry and apparel, leather, accessories, footwear, and retail within the textile industry. ...
This article investigates the development over time of the automotive and textile industries post-1989 in four Central European countries in order to identify the key reasons behind sectoral growth or decline. The analysis demonstrates a divergent pattern of sectoral development, one that is in contrast to the perceived initial endowments of the countries and the structural positions of the sectors at the outset of the transition. Comparing the two sectors and individual success stories within them against a broader background of sectoral success and failure allows us to understand and isolate factors that lie behind the high status of the automotive sector by not only regional but also international standards. The article identifies three crucial factors that can be attributed to these outcomes: presence of foreign capital in the sector, active government support, and cooperative strategies among the firms in the sector and among the firms and other institutions in the countries.
... By creating linkages between university programs in these countries, the project created a global framework that would better foster the globalization of teaching and learning. The countries represented by the project are ideal in that each has established industries in the manufacturing and distribution of textile and apparel-related products (DesMarteau, 2005;Hanzl-Weiss, 2004), and each is home to postsecondary academic programs in textiles and apparel. ...
Textile and apparel industry professionals must be capable of dealing with cultural differences and diverse perspectives on a multinational scale. To address the challenges involved in educating students for the global industry workforce, a 3-year collaborative project was conducted through partnerships between faculty at three U.S. universities and five universities in Thailand, Australia, and Russia. The project was designed to create learning modules based on real-world industry issues to foster global competence among students in textile and apparel programs. Tested in existing courses, module effectiveness was assessed using pre- and post-tests that included closed- and open-ended questions designed to measure students’“cultural intelligence” as an indication of global competence. Results suggest that exposure to the modules helped to improve students’ global competence. However, further development and testing of the modules is needed to include students in programs and countries in addition to those represented by this study.
... Asian nics have largely dispersed their production to Asian developing countries, which have surpassed the Asian nics in the production and export of clothing. for example, in 1996, taiwan was the fourth largest exporter of apparel to the United States, but has since dropped out of the top-ten list (table 1). the past two decades also witnessed a high concentration of outsourcing of intermediate and final products from Southern and western Europe to East-central Europe and Asia (Gustafsson 1984;Hanzl-weiß 2004;Dunford 2006). the rise of china in the clothing industry has characterized the global redistribution of production since the 1990s. ...
This article attempts to advance the research on industrial districts and regional development through a study of the restructuring of the clothing industry in Wenzhou Municipality, a regional driver of the Chinese economy. Wenzhou is known for the Wenzhou model of development traditionally centred on familyowned small businesses embedded in local institutions. The clothing industry is one of the leading industries in Wenzhou, and a cluster with national significance has emerged, where most of the production components can be purchased locally. However, the industry has been scaled up nationally and internationally, with the expansion of sales networks and production facilities across China, and to a lesser extent, abroad. This restructuring has changed the endogenous nature of industrial clusters/districts. The restructuring challenges the orthodox notion of the Wenzhou model and the New Regionalism literature, particularly the orthodox notion of Marshallian industrial districts that overly emphasizes small firms and local assets, and the global production network perspective that highlights coupling with global lead firms in regional development.
... This implies that these products are exported mainly outside the region around India and that this region is importing very few of these products. 57 These results can be explained by the low production costs in Asian countries due to relatively low wages for unskilled-labour (see, for example, Hanzl-Weiβ, 2004). Although India has a relatively strong comparative advantage in these products and the majority is transported to Europe and the United States, the impact for the Dutch economy is probably small because the Netherlands are hardly producing these goods anymore. ...
India's impressive economic performance over the past few decades has had a positive net impact on the Dutch economy. Peculiar for India is its relatively strong position on the global markets for services. Imports of cheap Indian products have slightly improved Dutch households' purchasing power. Increasing Indian exports did not have a noticeable impact on the pace of restructuring in the Netherlands. Nor did this development lead to a marked widening of Dutch wage differentials. Concerning global competition, Indian export products tend to be more complements than substitutes for Dutch export products. The large Indian market yields interesting investment opportunities for Dutch firms.Over the next few decades, the Indian economy is expected to continue its rapid expansion. Increasing trade with India will continue and is expected to enhance Dutch welfare in the upcoming years and will continue to be associated with modest increases in competition and continued restructuring on some markets.
... Most of such decline is due to the massive collapse of employment in the clothing, footwear and textile industries (-235,000 workers) and, at the lower degree, in the furniture and fixture industries (-10,000 workers). Due to the globalization of trade and production, these low technology and labor-intensive industries are experiencing a global shift of jobs away from high-wage countries toward low-wage economies (Gereffi and Korzeniewicz, 1994; Hanzl-Weiss, 2004). Italy is not an exception. ...
Through employment and firms data we analyze the evolving structure of the Italian cultural economy and highlight diverging spatial and organizational patterns of cultural production systems in urban and regional areas. Whilst large metropolitan areas remain the most important loci of the creative economy, craft-based sectors and creative sys- tems of design have a tendency to locate in small and non metropolitan centers. Based on the historical formation of manufacturing districts and on the growing role of the cultural production and consumption systems in urban spaces, the Italian creative econ- omy provides an interesting case study to analyze the geographical patterns of cultural and creative industries. We extend previous literature on the geography of the creative and cultural economy by offering trough the italian case new insights as to idiosyncratic conditions in which cities and regions emerge as leading centers of cultural production and creativity.
... Export competitiveness could be gained also via outward processing, under which local business is manufacturing, handling or repairing goods for clients abroad (United Nations 2004, Annex B, p. 101). In reality, however, of the two countries, only Romania is a relatively important location for outward processing, and mostly in textiles and footwear, especially for Italian firms (Hanzl-Weiss, 2004, Montagnana, 2005Amighini and Rabellotti, 2006. It is less developed in other industries in Romania, and in Bulgaria in general. ...
Bulgaria's and Romania's transition from central planning to market economy has been long and difficult. The lateness of their transformation made their entry into the European Union possible only three years later (in 2007) than the other transition economy candidates for membership. The delayed transition and 'Europeanization' of Bulgaria and Romania have been reflected in the patterns of their inward foreign direct investment. Almost three quarters of these inflows accumulated since the beginning of transition have been attracted after the Thessaloniki Summit in 2003 which locked the date of their entry into the European Union. Moreover, there are questions surrounding the quality and the development impact of inbound foreign direct investment. Despite the major labour cost and corporate tax advantages of locations Bulgaria and Romania, these countries have attracted relatively few efficiency seeking projects, mostly in garments and footwear, an industry that may be under global competitive threat. Potentially, however, they could become the 'workbench' within the European Union for many other industries, too. In the near future, the main challenge of these low-income locations is how to ensure that their investment potential materializes. To arrive there, it is important to further improve the business environment (as a continuation of the impressive pre-accession efforts) by strengthening the judiciary system, fighting against corruption and in Bulgaria, against organized crime.
... In addition, up to 2005, international trade of textiles and clothing was internationally regulated by the World Trade Organization Agreement on Textiles and Clothing (ATC). As described by Hanzl-Weib (2004), textiles and clothing are labour-intensive sectors where production is mostly carried out in small and medium-sized firms. Nonetheless, it should be noted that textiles and clothing are not homogeneous in terms of the sophistication of production, as low and high value-added segments coexist within the same sectors or even within the same industry. ...
... xi The processing trade (in Romanian lohn) is an international contract through which the producer commits to produce a good following the technical specifications of the contractor, and charges a fee as remuneration for its activity. Italian firms have been taking advantage of this duty system since the early 1990s (Graziani, 1998;Hanz Weiß, 2004;World Bank, 2004). xii This is a common sentiment expressed by several Italian entrepreneurs during the interviews. ...
Vertical disintegration in most industries and the globalization of markets has led to significant changes in the pattern of international division of labour among manufacturing firms. At the same time increased competition from low cost producers, exchange rate constraints, the opening up of CEE countries have had huge consequences for the Italian industrial system. This paper deals with the Veneto footwear, furniture and refrigeraion industries and examines the effects of foreign direct investments and subcontracting in Romania. The reorganization of the division of labour, in the most dynamic suppliers induced a change in the “nature of subcontracting”, upgrading along the ladder of the value chain as more and more operations are offshored.
... These firms employed mainly veneered plywood, which could be easily purchased from large transnational enterprises, while other components made of all-wood or other materials (steel, plastic, glass) were supplied by firms operating within the district or by other firms, Italian or foreign, located in Turkey or in Asia. 29 They needed a complex, 27 On the relative improvement of the comparative advantage of the country within this sector see also Hanz Weiß, 2004. 28 The case of Bonis is particularly interesting: at the time of our interview, the Italian manager was planning to open a plant in China for the production of shoes for its main client, Tommy Hilfiger, exclusively directed to the US market, where consumers pay attention firstly to the price of the product. ...
The present paper develops a moral hazard model applied to a multinational firm (MNF)'s decision between foreign direct investment (FDI) and international subcontracting. We compare the results of the moral hazard model, characterized by the fact that the MNF is not able to control operations performed by the subcontractor firm, with the traditional model, which considers symmetric information. We conclude that the uncertainty associated with the subcontractor firm's behaviour, in spite of increasing the preference of the MNF to engage in FDI, does not change the optimal decision, which continues to be to subcontract. The exception occurs in the case that the subsidiary stands as more efficient than the subcontractor firm.
... Exports of each type are also composed of different subtypes (such as wooden and metal furniture), but discussion of the details here lies well beyond our current frame of reference. Flows from poor to rich countries, moreover, involve products that are increasingly caught up in various kinds of subcontracting and production-sharing arrangements (Gereffi, , 1995Hanzl-Weiss, 2004;Henderson, Dicken, Hess, Coe, & Yeung, 2002;Kessler, 1999). Figure 2 demonstrates that our three industries seem nowadays to be well on the way to full participation in the global economy. ...
A basic approach to the geographic investigation of low-technology, labor-intensive industries is sketched out by invoking notions of industrial organization, locational agglomeration, and spatial divisions of labor. The distribution of the clothing, footwear, and furniture industries across the contemporary world is described on the basis of detailed published statistics. Special emphasis is accorded to similarities and contrasts in the geography of production between more developed and less developed countries. I show that no matter what the level of development, agglomeration tends to be a pervasive (though not universal) feature of these three industries. Global trading patterns in the three industries are subjected to extended investigation. I examine international flows of finished products as well as production-sharing activities involving various kinds of subcontracting arrangements between high-wage and low-wage countries. I then attempt to demonstrate in theory how spatial agglomeration and international commodity flows function as mutually reinforcing phenomena via the play of increasing returns effects. The significance of low-wage, low-technology industries for processes of economic development is also stressed. In the conclusion I suggest that the global geography of production is tending more and more to assume the form of a far-flung mosaic of competing and collaborating agglomerations at various levels of productive capability and development.
Introduction. Rethinking the operational models of textile and footwear industry companies, transforming their organisational structures and marketing strategies, necessitates research and development to create new samples and materials that are most demanded in the new conditions. Methods. The research concept is based on the axiomatic method and system-logical analysis, the method of formalising the model of modern directions of research and development in the textile and footwear industry, the method of summarising results, the method of comparative analysis in processing economic information, and the hypothetical method of the necessity of digital design of new products using the "House of Quality" approach. Results and Discussion. Current research and development in the textile and footwear industry are directed towards creating new goods (samples, products), new technologies and equipment, and new types of production raw materials. In the textile and footwear industry, automation and digitalisation stand out as key tools for research and development, enhancing the efficiency of design and production processes, particularly for custom orders and small-scale production. Conclusion. Despite the advent of numerous innovations in textile materials, fibers, garments, and footwear, the level of research and development activities in specific companies is inadequate, which poses a significant threat to the economic security and the ability to meet societal needs for industry products. The proposed resulting indicator for research and development is the innovation saturation coefficient, which measures the efficiency of research and development expenditures. To enhance the effectiveness of the project phase in research and development within the textile and footwear industry, it is suggested to use the "House of Quality" tool.
This article examines the different ways of integration of East Central Europe
into the global production networks of the labour-intensive textile and clothing
industry based on a comparative analysis of sector-specific foreign trade data.
The strongly internationalised character of the industry as well as the sectoral
statistics available in a homogenous structure make the used database an
adequate tool for the identification of the most important structural changes and
the development paths of the larger textile and clothing exporters, which can be
well compared in the busy one and a half decade after the turn of the Millennium.
By mapping and explaining the main restructuring tendencies, this short writing
offers a base for the evaluation of the most perspective segments within the
declining industry and tries to answer the question whether there are any forms
or chances for the preservation of this traditional industrial culture. The results
of the research suggest that East Central Europe can be regarded less and less as
a cost-efficient production location of the textile and clothing industry supplying
the wealthy Western European markets. The product structure and spatial
relations of the East Central European textile and apparel trade are determined to
a growing extent by local actors of the clothing market building their own brands
and production networks as well as by producers and consumers of technical and
other special textile products.
Purpose
This paper aims to study the productivity growth in the Indian apparel industry in aggregate over the period 1995–2015 and compare the performance of the Indian apparel industry during the decade of the Agreement on Textiles and Clothing (ATC) and the decade post its expiry.
Design/methodology/approach
The aggregate productivity performance has been studied using the technique of growth accounting and the translog index. A comparison of industry performance has also been made by analysing data. The data has been collated from Annual Survey of Industries reports, CMIE Economic Outlook and CMIE Industry Outlook databases.
Findings
The apparel industry has seen significant growth in terms of all industry variables and exports. However, the growth in exports is much lower than the growth in other industry variables related to output and input. While there is productivity improvement in aggregate over the study period, the quantum is low. Total factor productivity growth is positive and higher for the period post the ATC.
Originality/value
To the best of the author’s knowledge, there has been no such recent study comparing performance and productivity in Indian apparel manufacturing during and after the expiry of the ATC.
Egy bő fél évtizedet átfogó munka eredményét tartja kezében a Tisztelt Olvasó. A könyv azt vizsgálja, hogy a félperiférikus helyzetű magyar gazdaság mely tényezők által befolyásoltan, milyen szerepekben vesz részt az ipar nemzetközi munkamegosztásában, és ez miként határozza meg fejlődési-felzárkózási perspektíváit. Ehhez egy jelentős hagyományokkal rendelkező, de az utóbbi évtizedek gazdasági szerkezetváltásai során csekély figyelmet kapott és súlyából sokat veszített hazai élőmunka-igényes iparág, a bőr- és cipőgyártás átalakulásának kritikai szemléletű bemutatását és jövőbeli perspektíváinak felvázolását használja eszközként.
A jelentős globális és európai kitekintést is tartalmazó gazdaságföldrajzi munka a releváns nemzetközi és hazai szakirodalom áttekintésén túl statisztikai adatok feldolgozására és kiterjedt terepi kutatásra épül. Az elmélet és (az) empíria összekapcsolása egyszerre szolgálja a korszerű elméletek megismertetését és a (vizsgált) probléma megértését. A tudományos igényű anyag fogyasztható módon történő tálalására törekszik, hogy az oktatási célra is használható legyen, illetve a téma iránt érdeklődő iparági szereplőknek és szélesebb közvéleménynek is szóljon.
A könyv kiindulópontja a világrendszer-elméletből kölcsönzött félperiféria fogalma: elemzése a globális áru- és értékláncok, illetve termelési hálózatok összekapcsolódó elméletkörének félperiféria szemszögéből történő adaptációjára épül. Az elméleti háttérre jellemző többléptékű térszemlélet alkalmazásával célja, hogy egyrészt bemutassa a különböző szinteken érvényesülő, vizsgált iparág átalakulását mozgató erőket, másrészt hidat teremtsen a globális értéklánc-kutatások magyarországi meghonosításában élenjáró, inkább ágazati szemléletű közgazdász műhelyek, valamint a területi kérdések iránt érzékenyebb iparföldrajzi kutatások között.
Labour-intensive industries suffered a spectacular loss of their weight in the industrial structure of post-socialist Hungary having an intermediary position between the Western economies controlling the global industrial value chains and the Eastern low-cost production locations. This degradation process can be particularly witnessed in the case of the footwear industry which experienced two large waves of decline, one during the change of regime in 1989 and the other after the turn of the millennium. In the background of the changing performance of the footwear sector there were also significant structural changes during both periods of decline. Integration into global production networks by subcontracting or as subsidiaries of foreign enterprises, process and functional upgrading tendencies within the existing value chains as well as the establishment of Hungary’s own brand products for niche markets are the most important issues in this respect. This study is built upon two key questions: (1) What kind of dynamics does the Hungarian footwear industry show during its integration into the (global) production networks of the sector? (2) How are global production networks becoming embedded into the local economy; and to what extent can the transformation of the Hungarian footwear industry be considered as a path- and place-dependent process? The empirical research is based on semi-structured and in-depth interviews carried out in the last three years with representatives of enterprises from eleven industrial locations – comprising about 35 % of the total sectoral employment – in addition to sector-relevant national and local institutions.
The European footwear industry has recently faced another stage of considerable restructuring, in terms of its geography, the spatiality of value chains and the strategic focus of its lead firms. Drivers have been the crisis of Fordism, political-economic changes in Europe and the world, and the emerging dominance of fashion on the markets, all of these factors unfolding at different times and speeds. The paper takes stock of the sector's shifting geography by reviewing relevant literature on footwear districts in the European Union, augmented by document analyses. Upgrading footwear to a fashion industry generated an altered intra-European spatial division of labour under the double imperative of investing in market access and achieving low production costs. A variety of footwear companies have emerged that have affected the dynamics of former and actual footwear districts by increasingly creating production networks between different production spaces in Europe. As a result, a dynamic and complex production network, connecting a diversity of places across the EU, has emerged.
The footwear industry began as a small business with a small manufacturing base and has developed into one of the most successful modern industries. Footwear itself has progressed from being a basic necessity into a luxury item, and several well-known brands have emerged in the last few decades. in this chapter the factors contributing towards the rise of the footwear industry, including global market shares, advertising budgets and global consumption, are explored. Consumers now spend more on footwear than ever before, as a result of rising economies and surplus buying power. advertising has played an important role in the footwear business, serving as a link between the consumer and the retailer. it is now an essential part of the footwear business, and companies set aside large budgets for advertising in order to promote themselves to consumers and stay ahead of the competition.
Purpose
– The purpose of this paper is to explore historical paths of successful companies’ sustainability commitment, discover internal and external forces that shaped today’s sustainability leaders and show how companies implemented efforts toward sustainability to respond to those circumstances. It offers an in-depth understanding of sustainability-related strategies implemented by highly sustainable companies and serves as encouraging cases for other companies willing to engage in sustainability.
Design/methodology/approach
– This research took a case-study approach to help build a new theory toward sustainability development and approaches. A content analysis and review of both companies’ annual financial reports and corporate sustainability reports, between 1995 and 2012, and relevant news articles was performed.
Findings
– Data analysis showed that companies initiated and executed various strategies sustainability in their business, which evolved into themes for their stages of growth. Findings showed that: different companies approached sustainability differently based on their varied experiences; companies’ past and present efforts help to understand their business strategies and commitments more as a holistic process. Companies were affected by external circumstances, such as rewarding partnerships, ranking indices and media criticism for their working conditions, in response to which both the companies designed and implemented their own sustainability approaches.
Originality/value
– This study explored a longitudinal analysis of leader companies’ historical sustainability practices. It focused on how two different companies approached sustainability differently based on their varied experiences, thus showing that sustainability can be a source of competitive advantage for companies.
The paper analyses social citizenship in post-Yugoslav states from a gendered perspective. It explores the parallel transformations of citizenship regimes and gender regimes on the basis of the case study of the textile industry, a traditionally “feminised” industrial sector in which employment rates have significantly declined in the last twenty years. By comparing the cases of Leskovac (Serbia) and Štip (Macedonia), the paper shows that transformations in social citizenship had profound implications when it comes to gender regimes. The overall deterioration of labour and welfare rights in the region had major consequences on women’s position as workers and citizens, producing the demise of the “working mother” gender contract which existed during socialist times. The “retraditionalisation” of gender relations in the post-Yugoslav region, therefore, is not only a consequence of nationalist discourses, but is also a direct result of transformations in social citizenship which occurred during the post-socialist transition.
The paper analyses the parallel transformations of citizenship regimes and gender regimes in post-Yugoslav states, analysing the case study of women working in the textile and clothing industry, a traditionally feminised industrial sector in which employment rates have significantly declined in the last twenty years. On the basis of interviews with textile workers and former textile workers living in Leskovac (Serbia), Štip (Macedonia) and Bosanski Novi/Novi Grad (Bosnia-Herzegovina), the paper shows that post-socialist and post-conflict deindustrialisation and subsequent transformations in social citizenship had profound implications when it comes to gender regimes. The overall deterioration of labour and welfare rights in the region had major consequences on women's position as workers and citizens, producing the demise of the “working mother” gender contract which existed during socialist times. The “retraditionalisation” of gender relations in the post-Yugoslav region, therefore, is not only a consequence of nationalist discourses, but is also a direct result of transformations in social citizenship which occurred during the post-socialist transition.
The enhanced European Union is a major world producer and exporter of textile and clothing products. Nowadays, the sector is in a challege, as a result of the competence of new international competitors such as China or India and the changes in the international regulatory framework. This scene urges the necessity of the European textile and clothing sectors for continuing with the modernization and specialization process in the highest value added manufacturing activities, design and distribution. For these reasons, it is necessary to implement a regional enhanced European regional strategy, including the PANEUROMED countries.
Purpose
– The purpose of this study is to examine the delocalization trend of the EU's clothing production to Central and Eastern European Countries (CEECs) and North Africa, focusing on the geographical shift of outsourced clothing production pattern within the two developing regions.
Design/methodology/approach
– In total, 14 CEECs and North African countries were selected and classified into 1st‐tier and 2nd‐tier regions according to their GDP/capita values. Clothing trade statistics were obtained from the Eurostat database, and the clothing trade pattern was examined during 1995 to 2004. Trade Specialization Coefficient (TSC) was employed to measure the international competitiveness of clothing exports of the selected CEECs and North African countries.
Findings
– Results concluded that the EU's clothing production had significantly delocalized to the proximate CEECs and North African regions, with further geographical shift to less‐developing 2nd‐tier clothing supplying countries in recent years. The TSC analysis reflected that the competitiveness of clothing industry in 2nd‐tiers had outperformed the 1st‐tier economies, indicating Western European firms had shifted their sourcing practices to those lower‐waged countries.
Originality/value
– This study gives insight into the EU clothing production industry and their delocalized pattern to the CEECs and North Africa.
The aim of this paper is to estimate the effect of FDI and trade openness on average sectoral wages in the manufacturing industry in the CEECs in the post-transition era. We utilize a cross-country sector-specific econometric analysis based on one-digit level panel data for manufacturing industry in the Czech Republic, Hungary, Poland, Slovakia, and Slovenia for the period of 2000–2004. The results suggest that in the short run, productivity has a weak effect on wages, unemployment a strong one, FDI a positive one that is driven mostly by the capital intensive and skilled sectors, and international trade none. In capital-intensive sectors the effect of productivity seems stronger than in labor intensive ones, and the effect of unemployment seems stronger in unskilled sectors then in skilled ones. In the medium-run, the effects of productivity remain modest and that of unemployment stronger. Interestingly, the effect of FDI turns negative. Exports have a negative effect on wages and imports a positive one. However this negative effect can also be an indicator of inverse causality, and should be interpreted cautiously.
The present paper develops a moral hazard model applied to a multinational firm (MNF)'s decision between foreign direct investment (FDI) and international subcontracting. We compare the results of the moral hazard model, characterized by the fact that the MNF is not able to control operations performed by the subcontractor firm, with the traditional model, which considers symmetric information. We conclude that the uncertainty associated with the subcontractor firm's behaviour, in spite of increasing the preference of the MNF to engage in FDI, does not change the optimal decision, which continues to be to subcontract. The exception occurs in the case that the subsidiary stands as more efficient than the subcontractor firm.
The enhanced European Union is a major world producer and exporter of textile and clothing products. Nowadays, the sector is in a challege, as a result of the competence of new international competitors such as China or India and the changes in the international regulatory framework. This scene urges the necessity of the European textile and clothing sectors for continuing with the modernization and specialization process in the highest value added manufacturing activities, design and distribution. For these reasons, it is necessary to implement a regional enhanced European regional strategy, including the PANEUROMED countries. La Unión Europea ampliada es un importante productor y exportador mundial de productos textiles y de confección. Actualmente se encuentra ante el desafío de nuevos competidores internacionales, como China e India, y cambios en el marco regulador internacional. Esto supone la necesidad para Europa de profundizar aún más en el proceso de modernización y especialización en los segmentos de mayor valor añadido de la manufactura, el diseño y la distribución. Para ello, es imprescindible la consolidación de una estrategia regional europea ampliada al espacio PANEUROMED.
The aim of this paper is to estimate the effect of FDI and trade openness on wages in the CEECs in the post-transition era. We utilize a cross-country sector-specific eceonometric analysis based on one-digit level panel data for manufacturing industry in the Czech Republic, Hungary, Poland, Slovakia, Slovenia, for the period of 2000-2004. The results suggest that the increases in productivity are reflected in wages only to a modest extent, even in the long-term, leading to a steady decline in the share of labor in manufacturing industry in almost all sub-sectors in all countries. Meanwhile, the high significant and negative effect of unemployment on wages shows that the labor market is flexible in terms of wage flexibility. FDI has a positive effect on wages only in the capital and skill intensive sectors. The results also show that the increase in trade with EU did not lead to positive prospects for wages in manufacturing industry, contrary to the expectations of pro-market policies and traditional trade theory. The long-term net effect of exports and imports is negative, suggesting that integration of CEECs to EU via trade liberalization have worked at the expense of labor.
While apparel manufacturing is often considered the quintessential global industry, the regional dimension of trade and production in the textile and clothing sector is less widely noted. In this paper I discuss two macroregional production blocs: North America (defined as the United States, Mexico, and the Caribbean Basin countries) and Greater Europe [which includes the European Union (EU), Central and Eastern Europe, Turkey, and North Africa]. Analyzing what opportunities regionalization might provide is particularly relevant given China’s increasing dominance of both the EU and US import markets in the post-Multifibre Arrangement period. Drawing on the global commodity chains literature, I discuss three dimensions around which cross-regional comparative research on the European and North American apparel sectors can be organized: (1) production model; (2) institutional context; and (3) development outcomes. Several similarities between these production blocs are noted, particularly with regard to the intraregional division of labor expressed by networks connecting firms in higher-wage and lower-wage countries and the coexistence of assembly subcontracting and full-package manufacturing in both regions, but differences include the existence in Europe of a stronger textile base and a more expansive regionalization strategy (as suggested by the Euro –Mediterranean Partnership), which may strengthen the competitiveness of the Greater European bloc vis-à-vis its North American counterpart.
Rulings made by the World Trade Organization (WTO) dispute settlement body have, since the organization's creation in 1995, significantly advanced global economic liberalization. The response of business has been varied and far from uniformly supportive of the WTO agenda. The reason stems from the fact that adjusting to liberalization measures is easier in some industries than in others. The response is premised on the strategic alternatives available within an industry. Through examining antidumping (AD) elements of the European Union (EU) trade policy regime in the context of two European industries - chemicals and textiles - we find that both are under severe competitive pressure, due to WTO-induced market liberalization. However, the responses taken by companies within the respective industries are very different. We suggest that while WTO activity catalyzes industry evolution, the form of that adjustment is highly industry specific. In the case of textiles, the disaggregation of the industry value chain allows for a variety of product and locational adjustment strategies. In contrast, the chemicals industry is nationally based, reliant on intellectual property for competitive advantage and structurally limited in its ability to adopt a wide range of adjustment strategies. Therefore, in the absence of alternative strategy options, EU chemical companies lobby for rule harmonization in the WTO.
This paper deals with the interactions between outward investments of western multinationals and export performance of their affiliates in transition countries. It argues that multinationals make an important contribution to increasing, diversifying and up-grading trade, because they are able to open the access to advanced technologies and, thereby, to international markets. The paper reviews the theoretical arguments, presents and extracts some stylized facts and discusses the policy implications of our research.
This paper deals with the situation of the textile sector in Russia and Central Eastern Europe, as well as with their EU trade in textiles. It gives a comparative analysis of the main sectoral economic trends, in particular regarding production and employment, factors affecting the competitiveness and the key features of the trade with the EU. The sector plays a relatively important role in economies of most CEECs (especially regarding employment and foreign trade), but is much smaller in Russia. There is also a significantly lower output per employee in Russia: the labour productivity is about 20% below the CEECs' level. Textile sector exports from the CEECs take a prominent position on the European market, whereas those from Russia are extreme small. While the sector records trade surpluses with the EU in the CEECs, Russia has a large trade deficit in this 1
Despite the unfavourable external economic climate over the past three years, the transition countries have displayed a reasonably good growth performance. The region as a whole has expanded more rapidly than the EU; it is also catching up in terms of productivity - especially in manufacturing. As of mid-2003, there are few signs of the protracted global economic slowdown threatening the transition countries' short- and medium-term growth prospects to any marked degree. Scheduled to join the EU in May 2004, a number of countries in Central and Eastern Europe which have attracted appreciable amounts of FDI recently improved their competitive position by securing larger export shares in the EU market. Russia continues to cash in on high revenues from energy exports; its GDP growth is accelerating while investments recover. Whereas some of the latecomers to reform and stabilization in the Balkans (Bulgaria, Romania and Croatia) have been rapidly catching up in many respects, the situation in most countries in the Western Balkans remains precarious. The economies of the transition countries in Central and Eastern Europe will grow on average by about 3% in both 2003 and 2004 - somewhat faster than over the period 2001 2002 and outstripping the eurozone again. A slow, but steady acceleration of GDP growth is forecast for Poland. Russia and Ukraine will also experience swifter growth in 2003, only to take time out in 2004. Inflation continues to drop to single-digit annual rates throughout the region (with the exception of Romania, Serbia & Montenegro and Russia), yet it is still higher than in the eurozone (except perhaps for the Czech Republic and Poland). Unemployment displays a similar pattern. Given the current gaps in labour productivity and efficiency reserves, the present modest rates of economic growth do not make for the creation of additional jobs. Although generally quite high, current account deficits in the EU accession countries are of no immediate concern as their financing is secured via capital inflows. This is not the case in the Western Balkans; Russia and Ukraine, however, continue to enjoy current account surpluses, with Russia slowly starting to attract an increasing volume of FDI as well.
We discuss the restructuring of the textile and clothing industry in two East European countries. The paper compares the industry there with that in Portugal. Even though this study is only concerned with one particular industry, it reveals how wide and intensive the problems of transition are. The case studies discussed illustrate many of these difficulties. Former state-owned enterprises are reorienting sales to Western markets under the pressure of competition from a new and expanding private sector that sells imported products. Trade among former Comecon countries remains difficult in spite of the recent free trade agreement between Visegr�d countries. The Czech Republic and Poland currently have a more dualistic market structure than Portugal: very large firms alongside a very fragmented private sector. We assess the contribution of the new, private firms in the Czech Republic to find that production and employment in the clothing industry performed quite well, in contrast with the former state-owned sector. The performance of and outlook for former state-owned enterprises are dismal, especially in textiles. In clothing, inward-processing trade has helped large firms. Using a simple analytical framework we show that the former Comecon countries were never as good at buying as the West is now. The changes in domestic demand appear to be the main explanation for the fall in output in the earlier years of economic transformation. In clothing, however, inward-processing operations are dampening the problems of transition.
[eng] We present a two-sided search model where agents differ by their human capital endowment and where workers of different skill are imperfect substitutes. Then the labor market endogenously divides into disjoint segments and wage inequality will depend on the degree of labor market segmentation. The most important results are : 1) overall wage inequality as well as within-group and between-group inequalities increase with relative human capital inequality ; 2) within-group wage inequality decreases while between-group and overall wage inequalities increase with the efficiency of the search process ; 3) within-group, between-group and overall wage inequalities increase with technological changes. [fre] Immigration et justice sociale. . Cet article est d�di� � la m�moire d'Yves Younes qui nous a quitt�s en mai 1996, et dont les derni�res r�flexions sur l'importance du ph�nom�ne migratoire dans les �tats-Unis des ann�es 1980-1790 m'ont beaucoup influenc�.. L'ouverture des fronti�res entre le Nord et le Sud peut-elle se retourner contre les plus d�favoris�s du monde, c'est-�-dire les non-qualifi�s du Sud ?. Avec deux facteurs de production, les migrations Sud-Nord b�n�ficient tou�jours aux moins qualifi�s du Sud, puisqu'ils y sont le facteur le plus abondant. Mais avec trois facteurs de production (trois niveaux de qualifications, ou deux niveaux et un facteur capital imparfaitement mobile), l'ouverture des fronti�res peut conduire � une baisse du salaire des moins qualifi�s du Sud si leur compl�mentarit� avec le travail tr�s qualifi� ou le capital du Nord est suffisamment faible compar�e � celle des sudistes plus qualifi�s.. Plusieurs �tudes r�centes sugg�rent effectivement que les �lasticit�s de compl�mentarit� chutent brutalement au-del� d'un certain �cart de qualification. Cependant, rien ne prouve que ces effets soient suffisamment forts pour que l'ouverture optimale des fronti�res du point de vue de la justice sociale
Time is money, and distance matters. We model the interaction of these truisms, and show the implications for global specialization and trade: products where timely delivery is important will be produced near the source of final demand, where wages will be higher as a result. In the model, timely delivery is important because it allows retailers to respond to fluctuating final demand without holding costly inventories, and timely delivery is only possible from nearby locations. Using a unique dataset that allows us to measure the retail demand for timely delivery, we show that the sources of US apparel imports have shifted in the way predicted by the model, with products where timeliness matters increasingly imported from nearby countries.
Development and Prospects of the Textiles and Textile Products Sector in the Central and Eastern European Countries
- D Hanzl
Hanzl, D. (1998), Development and Prospects of the Textiles and Textile Products Sector in the Central and Eastern European Countries (A study commissioned by Bank Austria, October).
Textiles in Central and Eastern Europe and Russia: A Compara-tive Analysis in the European Context' (The Vienna Institute for International Economic Studies (WIIW) and RECEP
- D Hanzl
- P Havlik
Hanzl, D. and P. Havlik (2002), 'Textiles in Central and Eastern Europe and Russia: A Compara-tive Analysis in the European Context' (The Vienna Institute for International Economic Studies (WIIW) and RECEP, Moscow, unpublished document, June).
Competitiveness of Central and Eastern European Industries Now and in an Enlarged EU' (Study commissioned by Bank Austria-Creditanstalt
- D Hanzl-Weiß
- W Urban
Hanzl-Weiß, D. and W. Urban (2002), 'Competitiveness of Central and Eastern European Industries Now and in an Enlarged EU' (Study commissioned by Bank Austria-Creditanstalt, December).
Competitiveness of Industry in Candidate Countries: Leather and Footwear Sector (Study made on behalf of the European Commission
- D Hanzl
Hanzl, D. et al. (2001), Competitiveness of Industry in Candidate Countries: Leather and Footwear Sector (Study made on behalf of the European Commission, DG Enterprise, March, published on the Internet-Homepage of the European Commission, July 2001).
Outsourcing and Outward Processing in the European Footwear Industry: The Role of Candidate Countries
- P Brenton
- R Januskaite
Brenton, P. and R. Januskaite (2001), 'Outsourcing and Outward Processing in the European Footwear Industry: The Role of Candidate Countries', in D. Hanzl et al. (eds.), Competitiveness of Industry in Candidate Countries: Leather and Footwear Sector (Study made on behalf of the European Commission, DG Enterprise, March).
Patterns of Structural Change in CEEC Manufacturing
- W Urban
Urban, W. (1999), 'Patterns of Structural Change in CEEC Manufacturing', in M. Landesmann (ed.), WIIW Structural Report. Structural Developments in Central and Eastern Europe (The Vienna Institute for International Economic Studies, Vienna).
The Impact on Employment and Income of Structural and Technological Change in the Clothing Industry The Textile and Clothing Industry in the EU: A Survey
- D Spinanger
- W Strengg
Spinanger, D. (1992), 'The Impact on Employment and Income of Structural and Technological Change in the Clothing Industry', Kiel Reprints, No. 39. Strengg, W. (2001), The Textile and Clothing Industry in the EU: A Survey, Enterprise Papers No. 2 (published by the DG Enterprise, July).
Conference papers ‘The Future of the Textile and Clothing Industry in an Enlarged Europe
- P Hennessy
Hennessy, P. (2003), Conference papers, 'The Future of the Textile and Clothing Industry in an Enlarged Europe' (20 March, 2003; see Internet-Homepage: http://europa.eu.int/comm/ enterprise/textile/conf_tc200303_doc_en.htm).
The Textile and Clothing Industry in the EU: A Survey
- W Strengg
Strengg, W. (2001), The Textile and Clothing Industry in the EU: A Survey, Enterprise Papers
No. 2 (published by the DG Enterprise, July).
The Impact on Employment and Income of Structural and Technological Change in the Clothing Industry
- D Spinanger
Spinanger, D. (1992), 'The Impact on Employment and Income of Structural and Technological
Change in the Clothing Industry', Kiel Reprints, No. 39.
- C L Evans
- J Harrigan
Evans, C. L. and J. Harrigan (2003), 'Distance, Time and Specialization', NBER Working Paper
Series No. 9729 (National Bureau of Economic Research).
Textiles in Central and Eastern Europe and Russia: A Comparative Analysis in the European Context’(The Vienna Institute for International Economic Studies (WIIW) and RECEP Moscow unpublished document
- D Hanzl
- Havlik
Competitiveness of Central and Eastern European Industries Now and in an Enlarged EU
- D Hanzl-Weiß
- Urban
The Impact of the Newly Industrialising Countries on Production and Manufactures’ Report by the Secretary-General
- Oecd