Purpose This paper aims to analyse the impact of globalization on the manufacturing operations of industries and industrial districts and how it influences the specialization and diversification of manufacturing decisions. Design/methodology/approach The sample includes 9,684 Spanish manufacturing textile firms and the analysis is both cross‐sectional and longitudinal. Findings The results show that globalization tends to diminish the district and subsector effects over time, but they also show the positive impact of specialization on productivity and of diversification on business growth. Originality/value The paper indicates to managers that the production function in textile firms has viability in Europe through achieving specialization and efficient operations management.
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