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Fast Fashion: Theory and Evidence from Portuguese Textile and Clothing Firms
2022-04-29
Time: 10:00 am-11:30 am, Apr. 29th, 2022
Platform: Zoom
Speaker: Heiwai Tang
(University of Hong Kong)
Link: https://us06web.zoom.us/j/81626164288?pwd=Zmp1VG41dXF0by9UZTBRVkxSbjJWZz09
Meeting ID: 816 2616 4288
Passcode: inse
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. The removal of quotas is associated with an increase in the price and frequency of export transactions and with a reduction in average distance of firms’ exports. We rationalize our findings with a heterogeneous-firm model of exporting where firms decide which markets to serve as well as the frequency of transactions and the quality of exported products in each market. In response to low-wage competition, the more productive firms increase exports of high-quality products to nearby markets, while the less productive firms drop out from distant and low-income markets. These changes in export patterns imply that advanced economies become more specialized in “fast-fashion” —exporting higher quality products to closer markets at higher frequency.
Speaker:
Professor Heiwai Tang is a Professor of Economics, as well as Associate Director of the Asia Global Institute, the Institute for China and Global Development and the Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong (HKU). Prior to joining HKU, he was tenured Associate Professor of International Economics at the School of Advanced International Studies (SAIS) of Johns Hopkins University. He is also affiliated with the Federal Reserve Bank of Dallas (U.S.), the Center of Economic Studies and Ifo Institute (CESIfo, Germany), the Kiel Institute for the World Economy (Germany) and the Globalization and Economic Policy Center (U.K.) as a research fellow. He has been a consultant to the World Bank, the International Finance Corporation, the United Nations, and the Asian Development Bank; and held visiting positions at the IMF, Stanford, MIT, Harvard. He is currently an associate editor of the Journal of International Economics, the Journal of Comparative Economics and the China Economic Review. Since 2021, he has served on a number of public bodies, including the Currency Board Sub-Committee of the HKMA’s Exchange Fund Advisory Committee and the Minimum Wage Commission in Hong Kong. His research interests span a wide range of theoretical and empirical topics in international trade, with a specific focus on production networks, global value chains, and China. His research has been published in leading journals in economics, including American Economic Review and Journal of International Economics. His research and opinions have been covered by BBC, Bloomberg, China Daily, CNA, CNN, Financial Times, New York Times, Al Jazeera, Foreign Policy, South China Morning Post, and various think tanks such as the Brookings Institution and the Peterson Institute for International Economics. Professor Tang received his Ph.D. in economics from MIT in 2008.