活动内容

Topic

Fast Fashion: Theory and Evidence from Portuguese Textile and Clothing Firms

Speaker

Heiwai Tang

Professor, University of Hong Kong

Abstract

We study how firms respond to import competition by increasing the speed of trade. We use data on all Portuguese textile and clothing exporters’ monthly transactions and exploit the exogenous increase in competition following the removal of Multi-Fibre Arrangement (MFA) quotas on Chinese exports. Exporting firms respond to increased foreign competition by specializing in "fast-fashion"- exporting higher quality products to closer markets at higher frequency. We rationalize our findings with a heterogeneous-firm model in which firms choose what products to export and where to sell them, and in each market, the frequency of shipments as well as the quality of products. In response to low-wage competition, the medium-productivity firms increase exports of high-quality products to nearby markets, while the least productive firms drop out from distant and low-income markets.