Ready-to-Wear Development? Foreign Investment, Technology Transfer, and Learning by Watching in the Apparel Trade

Abstract

The commodity-chain approach to economic development has inspired a growing literature on the apparel trade. While advocates of the approach hold that North American apparel firms are transferring skill and technology to Mexico and are thereby encouraging “export upgrading” south of the border, I illuminate a parallel process of skill and technology transfer in the Caribbean Basin and thereby (1) underscore the generality of the commodity-chain approach to supply-chain integration and (2) call the benefits of integration into question. I maintain that the returns to skill and technology transfer are inversely related to the extent of skill and technology transfer and explore the inherent tension between the generality of the commodity-chain approach and the accuracy of its predictions.

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