Understanding productivity levels, growth and dispersion in the textiles sector in Argentina: an o-ring story of low-productivity trap

Gabriel Sanchez () and Inés Butler
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Inés Butler: Instituto de Estudios sobrela Realidad Argentina y Latinoamericana

Revista de Economía Política de Buenos Aires, 2010, issue 7-8, 49-102

Abstract: We use case study techniques to analyze the determinants of the marked productivity decline experienced by the textiles sector in Argentina since 1996. We find that, given the observed complementarity in the qualities chosen by different firms in this sector, low productivity results from a failure to coordinate in the investment in quality upgrading technologies by all firms. The sector was pushed to a poor productivity equilibrium by adverse financial shocks that combined with capital wedges to prompt some firms to invest in lower quality or to exit the market, propagating to the other firms through the quality complementarity.

Keywords: growth; textile sector; productivity (search for similar items in EconPapers)
Date: 2010
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