Creative Destruction or Just Plain Destruction?: The U.S. Textile and Apparel Industries since 1972

James Levinsohn and Wendy Petropoulos

No 8348, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Are the U.S. textile and apparel industries examples of creative destruction or are they just plain destructing? We investigate this question using both aggregate industry-level data and plant-level data from the U.S. Census' LRD. We find that while the aggregate-level evidence is consistent with the common view of these industries as examples of declining industries, the plant-level data support a very different and much more hopeful view. We find that in the face of intensified international competition, each industry has evolved in its own way. In textiles, there has been tremendous capitalization. In apparel, the organization of production has changed. In both cases, industry productivity has increased markedly, and this is mostly because individual plants are becoming more productive.

Date: 2001-06
Note: IO ITI
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