Patrick Conway
Economics Department
University of North Carolina
Chapel Hill, NC 27599-3305

Research on the Impact of Import Competition

in the Textiles Industry in the US

My work, often in collaboration with UNC colleagues Alfred Field of the Economics Department and Robert Connolly of the Kenan-Flagler Business School, examines the role of international trade in the decline of the US textiles industry. Among the papers completed so far are:

• The Impact of Removal of ATC Quotas on International Trade in Textiles and Apparel (with Marco Fugazza)

  Bilateral trade data are used for the period 1997-2005 to estimate a model of production and consumption of textiles and apparel based on choice-theoretic foundations. The impact of the removal of the ATC quota system is examined in this context, and the effects are shown to vary by underlying comparative advantage of the producing country.

• The End of the MultiFiber Agreement: The Global Implications of Unravelling US Textiles Quotas

  A simple decomposition framework is combined with detailed import data for the US and EU to examine the country-level impact of quota removal on countries accustomed to exporting to the US and/or EU during the quota period. Risk factors are identified on a country level, and "winners" and "losers" are identified from the trade liberalization.

• Trade Liberalization in Textiles: Dynamic Policy Effects in an Import-Competing Economy

  This paper reports the results of dynamic simulations of a model of domestic production of textiles estimated using Bureau of the Census data for 1982-1999. The domestic price and the number of firms are calculated endogenously. Through use of this structural model, the effects of trade liberalization are separated from those of real wage increases and technological progress.

• When do Firms Downsize?

This paper examines data on employment loss and plant closure from 100 counties in North Carolina over the period 1980 through 2000. The propensity for downsizing or closure is explained in terms of country-wide characteristics: the skill level of workers, the availability of infrastructure, the degree of urbanization, and others.

• The Impact of Negotiated Restraints on US Trade in Textiles

Through a combination of US Customs data on negotiated restraints by trading partner and international trade data on volume and value of trade in textiles by trading-partner country, this paper explores the effectiveness of the US quota system in restraining imports in two categories of textiles imports. One contribution is the work with data disaggregated to the level of individual quota category. A second is the simultaneous consideration of US exports of these same products.

• Performance and Perception: Results from a Survey of US Textiles Manufacturers

This paper reports the results of a survey administered to a sample of textiles manufacturers in the US in 2004. The focus of the survey is the attitudes of firm managers with respect to the expiration of quotas under the Agreement on Textiles and Clothing (ATC) at the end of 2004. These attitudes are correlated with characteristics of the firms and with their performance over the preceding seven years. Also reported: the firm managers' suggestions for commercial-policy innovations once the ATC expires. (With Robert Connolly)

• The North Carolina Textiles Project: An Initial Report

This paper reports the conclusions we drew on the evolution and future of the textiles industry in the US from a round of interviews with textile firm owners in the summer of 2003. (with Robert Connolly, Alfred Field and Douglas Longman)

• Import Price Pressure on Firm Productivity and Employment: The Case of US Textiles

This paper is the report of research using the Longitudinal Research Database of the US Bureau of the Census to determine the effect of import competition on textile plant performance. It uses a novel decomposition of the data to distinguish import-competition effects from technological changes and evolution of industrial organization.

• Downsizing, Layoffs and Plant Closure: The Impacts of Import Price Pressure and Technological Progress on US Textiles Producers

This paper also uses the Longitudinal Research Database, but incorporates both static and dynamic equilibrium analysis to identify the relative contributions of technological progress and removal of import quotas in the movement of domestic prices of textiles, entry and exit of plants and the plant's investment decision.

• Charting Employment Loss in North Carolina Textiles

Using monthly data from the North Carolina Employment Security Commission, I use event-study techniques to search for the impact of increased import competition on job loss in textiles.

• Job Dislocation due to Import Competition: How Often Does Trade Adjustment Assistance Facilitate Relocation?

  Investigating the frequency that plant closure and downsizing is associated with worker benefits under the Trade Adjustment Assistance (TAA) and Worker Adjustment and Retraining Notification (WARN). The bottom line? Not so often. Simulation of the market for textiles production provides explanations for why this is so.

I also collaborated with the Center for the Study of the American South at UNC to convene a conference on 8-9 April 2004 entitled

• Community Adjustment to Textile Plant Closure and Downsizing.

Follow the link to the papers and proceedings of that conference.

Last edited: 4 September 2009