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Production Costs, Scale Economies, and Technical Change in U.S. Textile and Apparel Industries

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  • Anusua Datta
  • Susan Christoffersen

Abstract

The elimination of quotas in textiles and apparel poses new threats from import competition. To survive, the sectors need to find least-cost methods of production. The production–cost structure of the U.S. textile and apparel industries is examined using a dual cost framework. A translog cost function is used to measure substitution elasticities between inputs, scale economies, and the nature of technical change. The scope for factor substitution in textiles remains limited with all substitution elasticities being less than unity. Labor and materials are complements in apparel production, but there is evidence of substitution between capital and labor. The rate of technical change is higher in textiles than in apparel. Given the intense import competition from low wage countries, in both industries, technical progress is labor saving. Overall, economies of scale are larger in apparel; however, scale economies have continued to increase in textiles. Copyright International Atlantic Economic Society 2005

Suggested Citation

  • Anusua Datta & Susan Christoffersen, 2005. "Production Costs, Scale Economies, and Technical Change in U.S. Textile and Apparel Industries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(2), pages 201-213, June.
    • Handle: RePEc:kap:atlecj:v:33:y:2005:i:2:p:201-213
    DOI: 10.1007/s11293-005-3768-8
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    References listed on IDEAS

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    1. Magdalena Kapelko & Alfons Oude Lansink, 2015. "An international comparison of productivity change in the textile and clothing industry: a bootstrapped Malmquist index approach," Empirical Economics, Springer, vol. 48(4), pages 1499-1523, June.

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    More about this item

    Keywords

    L10; L23; L67;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment

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