ebook img

The Textile and Apparel Industry in Turkey and PDF

282 Pages·2006·3.43 MB·English
Save to my drive
Quick download
Download
Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.

Preview The Textile and Apparel Industry in Turkey and

Central European University Political Science Department Industrial and Firm Upgrading in the European Periphery The Textile and Apparel Industry in Turkey and Bulgaria by Evgeni Evgeniev Thesis submitted to the Political Science Department of the Central European University in partial fulfillment of the degree of Doctor of Philosophy DOCTORAL DEFENSE COMMITTEE Associate Prof. Dorothee Bohle, Central European University (Supervisor) Prof. Colin Crouch, The University of Warwick, United Kingdom Prof. Jaap Dronkers, European University Institute, Italy Prof. Béla Greskovits, Central European University, Hungary Prof. Mihály Laki, Institute of Economics, Hungarian Academy of Sciences, Hungary BUDAPEST October 2006 I hereby declare that this thesis contains no materials accepted for any other degrees in any other institutions. This thesis contains no materials previously written and/or published by another person, unless otherwise noted. Copyright © 2006 by Evgeni Evgeniev All rights reserved ii To my mother, who has greatly inspired my life iii ABSTRACT Under what conditions is upgrading of the light leading export sector possible? This dissertation embarks on the case of Turkey (1983-2003) and Bulgaria (1995-2003) to analyze the factors that determine local upgrading, thus furthering economic development and improving standing in the global economy. Drawing on primary reports, interviews, secondary literature (Sectoral Analysis, Global Value Chains and Business Association) and empirical analysis at the sectoral, network and firm level, the thesis demonstrates Turkey’s success and Bulgaria’s failure in industrial and firm upgrading. The claim of the thesis is that the modern state and the modern sector are not just static entities. The effects of the new technologies of production and organization of services have a tremendous impact on them which creates a diversity of responses. The responses drive the process of collaboration between the state and the sector. This collaboration is identified as State-Sector Aptitude Building and it helps local firms to re-position in higher value added segments of global value chains to improve industry’s export position in the global economy. KEYWORDS: textile and clothing industry, global value chains, sectoral analysis, industrial and firm upgrading, Central and Eastern Europe, periphery, Bulgaria, Turkey. iv Acknowledgements When I started the PhD program at CEU in September 2001, I did not have even the slightest idea that professional and personal life will be affected to such an extent by the selection of topic and countries. I embarked on a topic related to the textile and clothing industry, which I hardly new. I remember that it was my theoretical interest in Global Value Chains and Sectoral Analysis which drove me into this. Three years after my inception, I was already involved with the national strategy team for development of the clothing and later, the textile strategy of Bulgaria. I felt that working on this dissertation is not an end in itself, but it is rather a process. I was guided through this by a large group of people and institutions and these words of gratitude are directed to all of them. If it was not the generous support with a PhD grant and research grants by CEU, I would not be able to do this. During the research stage of my dissertation, I spent time at the Social and Political Science Department of the European University Institute in Florence (Italy) and the History Department of the Bosphorus University in Istanbul (Turkey), while the Political Science Department at CEU was my home. I would like to thank the scholars, students and administrators of all these departments for accepting me as a member of the family and helping me in very crucial moments of my academic life. The first and greatest debt I have run up in writing this thesis to my supervisor, Dorothee Bohle. I thank her for the time and interest, invaluable pages of comments and patience. It is also hard to believe that the thesis would have been completed without the constant support, encouragement and inspiration by Béla Greskovits and Mihály Laki. Their teaching and guidance profoundly changed my views and understanding of political economy. I owe special thanks to Colin Crouch, who has not only accommodated me well in the inspirational environment of EUI in Florence but has been also a careful listener and guided me through the application of the unit value analysis. I am indebted to Jaap Dronkers with whom I have taken a computer statistical course at EUI and who has generously provided his time in numerous consultation hours on the application of multivariate analysis. Gary Gereffi, Jennifer Bair, Svetlozar Andreev, and Yogeetha Garib have been extremely helpful in different stages of my work by reading and commenting on the application of industrial and firm upgrading and multivariate analysis. I am also indebted to Zainiddin Karaev and Svetoslav Salkin, colleagues at CEU, who patiently listened my thesis arguments and supplied advice on numerous occasions. I am also utterly grateful to Michael Shafer who has been very supportive and inspirational at the beginning of my work. It was thanks to Aslı Deniz, Business Council coordinator at Dış Ekonomik İlişkiler Kurulu (Foreign Economic Relations Board) without whom I would have never been able to be introduced to the Turkish textile and apparel industry through the front door. Similar role, but for the Bulgarian textile and apparel industry, was played by Vassil Radoinovski, Executive Director of Industrieconsult, who brought me to the world of consultancy work and the two national strategy teams. There were several Turkish students who took part in my research and among them I would like to point out two people, whom I made friends, Yasin Uygur and Engin Öztürk. I am highly indebted to Dani, who has been the closest person to me through all these years and whom I have constantly “bothered” on issues related to textile and clothing. Krisko, Savi and Rumi have often made my life in Budapest happier and I owe them a lot for that. I thank also Annisa Wanat for the editorial support and her excellent job, despite of the short notice. Last but by no means least, I would like to thank my family (Donka, Tzetz and Ilia) and also Pat and Debbie, for being always helpful, granting unconditional support in times when I most needed. Evgeni Evgeniev 20 October 2006 v TABLE OF CONTENTS LIST OF TABLES viii LIST OF FIGURES ix LIST OF ABBREVIATIONS x CHAPTER I. INTRODUCTION............................................................................1 1.1 SCOPE OF THE STUDY.....................................................................................................................1 1.2 COUNTRY CASES AND RESEARCH QUESTION.........................................................................2 1.3 THEORETICAL APPROACHES, MAIN CONCEPTS AND ARGUMENT.....................................4 1.4 STRUCTURE.......................................................................................................................................9 CHAPTER II. THEORY AND RESEARCH METHODOLOGY .........................11 INTRODUCTION....................................................................................................................................11 2.1 THEORETICAL BACKBONE..........................................................................................................11 2.1.1 Sectoral Analysis......................................................................................................................11 2.1.2 Global Value Chains.................................................................................................................15 2.1.3 Business Association literature.................................................................................................23 2.2 CAUSALITY.....................................................................................................................................25 2.2.1 Variables...................................................................................................................................25 2.2.2 Hypotheses................................................................................................................................33 2.3 QUALITATIVE AND QUANTITATIVE RESEARCH ANALYSIS...............................................34 2.3.1 Industrial Analysis....................................................................................................................34 2.3.2 Firm Analysis............................................................................................................................39 CONCLUSION........................................................................................................................................43 CHAPTER III. TEXTILE AND APPAREL INDUSTRY IN TURKEY.................44 INTRODUCTION....................................................................................................................................44 3.1 INITIAL CONDITIONS....................................................................................................................44 3.2 STATE POLICY IN THE POST-1983 .............................................................................................48 3.2.1 Integration into world markets.................................................................................................49 3.2.2 Exchange rate policy................................................................................................................53 3.2.3 Trade liberalization with EU....................................................................................................54 3.2.4 Foreign Direct Investment........................................................................................................58 3.2.5 Privatization.............................................................................................................................60 3.2.6 State industrial policy...............................................................................................................61 3.3 BRANCH ASSOCIATIONS..............................................................................................................68 3.4 TURKISH REALITY.........................................................................................................................73 3.4.1 Competition through informalization........................................................................................73 3.4.2 Competition through labor.......................................................................................................77 CONCLUSION........................................................................................................................................81 CHAPTER IV. INDUSTRIAL AND FIRM UPGRADING IN TURKEY..............83 INTRODUCTION....................................................................................................................................83 4.1 SECTORAL LEVEL..........................................................................................................................83 4.1.1 Low value added position in the 1980s.....................................................................................83 4.1.2 Climbing up in the 1990s..........................................................................................................87 4.1.3 Upgrading in the post-1995......................................................................................................89 4.2 NETWORK LEVEL .........................................................................................................................94 4.3 FIRM LEVEL ..................................................................................................................................102 4.3.1 Survey results..........................................................................................................................102 4.3.2 Analysis of three firm cases....................................................................................................114 CONCLUSION......................................................................................................................................126 vi CHAPTER V. TEXTILE AND APPAREL INDUSTRY IN BULGARIA............128 INTRODUCTION..................................................................................................................................128 5.1 INITIAL CONDITIONS..................................................................................................................128 5.2 STATE POLICY IN THE POST-1995 ...........................................................................................139 5.2.1 Integration into world markets...............................................................................................139 5.2.2 Exchange rate policy..............................................................................................................143 5.2.3 Trade liberalization with EU..................................................................................................144 5.2.4 Foreign Direct Investment......................................................................................................146 5.2.5 Privatization...........................................................................................................................147 5.2.6 State industrial policy.............................................................................................................150 5.3 BRANCH ASSOCIATIONS............................................................................................................152 5.4 BULGARIAN REALITY.................................................................................................................155 5.4.1 Competition through informalization......................................................................................155 5.4.2 Competition through labor.....................................................................................................158 CONCLUSION......................................................................................................................................165 CHAPTER VI. INDUSTRIAL AND FIRM UPGRADING IN BULGARIA........167 INTRODUCTION..................................................................................................................................167 6.1 SECTORAL LEVEL........................................................................................................................167 6.1.1 Low value added export position in 1995...............................................................................167 6.1.2 Low value added exports in 1996 and 1998............................................................................169 6.1.3 Low value added exports in 2001...........................................................................................170 6.1.4 Low value added exports sustained in 2003...........................................................................172 6.2 NETWORK LEVEL .......................................................................................................................176 6.3 FIRM LEVEL ..................................................................................................................................183 6.3.1 Survey results..........................................................................................................................183 6.3.2 Analysis of three firm cases....................................................................................................195 CONCLUSION......................................................................................................................................210 CHAPTER VII. RESULTS FROM MULTIVARIATE ANALYSIS....................211 INTRODUCTION..................................................................................................................................211 7.1 APPLICATION OF THE MULTIVARIATE ANALYSIS.............................................................213 7.1.1 Justification for the comparison of the two samples...............................................................214 7.2 TESTED MULTIVARIATE RESULTS WITH STATISTICAL PROCESSING ..........................218 7.2.1 Inter-correlation analysis of variables...................................................................................218 7.2.2 Creation of new indexes and dummy variables.......................................................................221 7.2.3 Regression models of variables and indexes...........................................................................225 CONCLUSION......................................................................................................................................230 CHAPTER VIII. CONCLUSION.......................................................................231 INTRODUCTION..................................................................................................................................231 8.1 COMPARATIVE OVERVIEW.......................................................................................................231 8.1.1 Similar starting positions, different outcomes........................................................................231 8.2 SECTORAL ANALYSIS AND ITS REVISION ............................................................................236 8.2.1 High SSAB in Turkey..............................................................................................................238 8.2.2 Low SSAB in Bulgaria............................................................................................................242 8.3 FINAL WORDS ..............................................................................................................................244 REFERENCES..................................................................................................258 APPENDICES...................................................................................................269 vii LIST OF TABLES TABLE 1 COMPARISON OF PRE-1980 AND POST-1980 ECONOMIC POLICIES IN TURKEY...49 TABLE 2 FOREIGN-OWNED FIRMS IN THE TURKISH T/C INDUSTRY.......................................59 TABLE 3 FOREIGN INVESTMENT LICENSES IN THE TURKISH T/C INDUSTRY......................59 TABLE 4 SUBSIDIZED INVESTMENT PROJECTS IN TEXTILE : TURKEY..................................62 TABLE 5 INVESTMENT CERTIFICATES GIVEN TO THE TURKISH T/C INDUSTRY................63 TABLE 6 SIZE DISTRIBUTION IN THE TURKISH T/C INDUSTRY (2001)....................................75 TABLE 7 AVERAGE WAGES, LABOR COSTS AND EMPLOYMENT STRUCTURE IN THE TURKISH T/C INDUSTRY (APRIL 2004, USD)..................................................................................76 TABLE 8 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (1983).............84 TABLE 9 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (1988).............85 TABLE 10 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (1991)...........87 TABLE 11 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (1995)...........88 TABLE 12 INTEGRATION OF TEXTILES AND CLOTHING INTO GATT......................................89 TABLE 13 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (2001)...........90 TABLE 14 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (2003)...........91 TABLE 15 STATE CAPITAL INVESTMENTS IN BULGARIA (1977-1988)...................................133 TABLE 16 FOREIGN DIRECT INVESTMENT IN BULGARIA BY SECTORS...............................147 TABLE 17 CASH PRIVATIZATION IN THE BULGARIAN T/C INDUSTRY.................................148 TABLE 18 NUMBER OF ENTERPRISES AND EMPLOYEES (1983-2003)....................................156 TABLE 19 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (1995).........167 TABLE 20 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (1996,1998) 169 TABLE 21 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (2001).........171 TABLE 22 UNIT VALUE ANALYSIS OF EC TEXTILE AND APPAREL IMPORTS (2003).........172 TABLE 23 EC APPAREL TRADE WITH BULGARIA (1995/2003)..................................................174 TABLE 24 COMPARISON OF THE TWO FIRM SAMPLES.............................................................214 TABLE 25 FACTOR LOADINGS FOR THE RELATIONSHIP BETWEEN TRADE AGENTS......222 TABLE 26 FACTOR LOADINGS FOR FIRM UPGRADING............................................................223 TABLE 27 PATTERN MATRIX OF DEPENDENCY AND RANKING............................................224 TABLE 28 FIRM DEPENDENCY MATRIX.......................................................................................224 TABLE 29 FIRM RANKING MATRIX...............................................................................................225 TABLE 30 REGRESSION OF UPGRADING INDEX USED AS DEPENDENT VARIABLE..........225 TABLE 31 REGRESSION OF UPGRADING INDEX WITH CONTROL FOR SMALL FIRMS......227 TABLE 32 REGRESSION OF UPGRADING INDEX WITH CONTROL FOR LARGE FIRMS......228 TABLE 33 SEPARATE REGRESSION MODELS FOR BULGARIA AND TURKEY.....................229 viii LIST OF FIGURES FIGURE 1 EXPORT ROLES OF INDUSTRIAL UPGRADING...........................................................20 FIGURE 2 TURKISH TRADE IN TEXTILES WITH THE WORLD....................................................50 FIGURE 3 TURKISH TRADE IN CLOTHING WITH THE WORLD..................................................50 FIGURE 4 TOP FIVE CLOTHING MARKETS: TURKEY...................................................................51 FIGURE 5 TOP FIVE TEXTILE IMPORTERS: TURKEY...................................................................52 FIGURE 6 SECTORAL SHARE OF TURKISH EXPORTS TO THE EU MARKET...........................56 FIGURE 7 EU TEXTILE AND APPAREL IMPORTS (1983-2003): TURKEY...................................93 FIGURE 8 MAJOR EXPORT MARKETS: TURKEY.........................................................................103 FIGURE 9 DOMINANT CONTRACTS OF TURKISH FIRMS WITH FOREIGN BUYERS............106 FIGURE 10 SHARE OF TURKISH FIRMS’ TWO MOST IMPORTANT SUPPLIERS....................107 FIGURE 11 SHARE OF TURKISH FIRMS’ INVESTMENT..............................................................111 FIGURE 12 MARKETING AND DESIGN DEPARTMENTS IN TURKISH FIRMS........................112 FIGURE 13 BULGARIAN TRADE IN TEXTILES WITH THE WORLD..........................................140 FIGURE 14 BULGARIAN TRADE IN CLOTHING WITH THE WORLD........................................140 FIGURE 15 TOP FIVE EXPORT MARKETS: BULGARIA...............................................................141 FIGURE 16 TOP FIVE TEXTILE IMPORTERS: BULGARIA...........................................................141 FIGURE 17 SECTORAL SHARE OF BULGARIAN EXPORTS TO THE EU MARKET.................144 FIGURE 18 EU TEXTILE AND APPAREL IMPORTS (1995-2003): BULGARIA...........................174 FIGURE 19 MAJOR EXPORT MARKETS: BULGARIA...................................................................184 FIGURE 20 DOMINANT CONTRACTS OF BULGARIAN FIRMS WITH FOREIGN BUYERS....185 FIGURE 21 SHARE OF BULGARIAN FIRMS’ TWO MOST IMPORTANT SUPPLIERS..............186 FIGURE 22 SHARE OF BULGARIAN FIRMS’ INVESTMENT.......................................................190 FIGURE 23 MARKETING AND DESIGN DEPARTMENTS IN BULGARIAN FIRMS..................192 FIGURE 24 CONCEPTUAL FRAMEWORK FOR FIRM UPGRADING...........................................211 ix LIST OF ABBREVIATIONS AATEB ASSOCIATION OF APPAREL AND TEXTILE EXPORTERS IN BULGARIA ATC AGREEMENT ON TEXTILE AND CLOTHING BA BRANCH ASSOCIATION BAATPE BULGARIAN ASSOCIATION OF APPAREL AND TEXTILE PRODUCERS AND EXPORTERS BAKI BRANCH ASSOCIATION OF THE KNITTING INDUSTRY BCCI BULGARIAN CHAMBER OF THE CLOTHING INDUSTRY CAD COMPUTER-AIDED-DESIGN CAM COMPUTER-AIDED-MANUFACTURING CBA CURRENCY BOARD ARRANGEMENT CEE CENTRAL AND EASTERN EUROPE CMT CUT-MAKE-TRIM CRI COMPETITIVENESS RESEARCH INSTITUTE CMEA COUNCIL OF MUTUAL ECONOMIC ASSISTANCE CUD CUSTOMS UNION DECISION DEIK FOREIGN ECONOMIC RELATIONS BOARD EBRD EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT EURATEX ASSOCIATION OF THE EUROPEAN TEXTILE AND APPAREL INDUSTRY EUROSTAT STATISTICAL DIVISION OF THE EUROPEAN UNION FDI FOREIGN DIRECT INVESTMENT FTA FREE TRADE AGREEMENT FTZ FREE TRADE ZONE GATT GENERAL AGREEMENT ON TARIFFS AND TRADE GDP GROSS DOMESTIC PRODUCT GFI GREEN FIELD INVESTMENT GTZ GESSELSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT GVC GLOBAL VALUE CHAIN IAF INTERNATIONAL APPAREL FEDERATION IMF INTERNATIONAL MONETARY FUND ISI IMPORT-SUBSTITUTION INDUSTRIALIZATION POLICY ITKIB ISTANBUL TEXTILE AND CLOTHING EXPORTER’S ASSOCIATION JV JOINT VENTURE MBO MANAGEMENT-BUY-OUT MFA MULTI-FIBER ARRANGEMENT NEM NEW ECONOMIC MECHANISM NSI NATIONAL STATISTICAL INSTITUTE OBM ORIGINAL BRAND-NAME MANUFACTURING OEM ORIGINAL EQUIPMENT MANUFACTURING ODM ORIGINAL DESIGN MANUFACTURING OPT OUTWARD-PROCESSING-TRAFFIC REGIME R&D RESEARCH AND DEVELOPMENT SA SECTORAL ANALYSIS SIA STATE INDUSTRIAL ASSOCIATION SMEs SMALL-AND-MEDIUM-SIZED ENTERPRISES SOEs STATE-OWNED-ENTERPRISES SPO STATE PLANNING ORGANIZATION SSAP STABILIZATION AND STRUCTURAL ADJUSTMENT PROGRAM TCMA TURKISH CLOTHING MANUFACTURER’S ASSOCIATION TEKSIF ISTANBUL TEXTILE WORKERS’ UNION TTEA TURKISH TEXTILE EMPLOYERS’ ASSOCIATION TURK-IS ISTANBUL LABOR UNION OF TEXTILE WORKERS WB WORLD BANK WTO WORLD TRADE ORGANIZATION x

Description:
The Textile and Apparel Industry in Turkey and Bulgaria by. Evgeni Evgeniev. Thesis submitted to the Political Science Department of the Central European University in partial fulfillment of the degree of Doctor of Philosophy. DOCTORAL DEFENSE COMMITTEE. Associate Prof. Dorothee Bohle, Central
See more

The list of books you might like

Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.