On the Growth of European Apparel Firms
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On the Growth of European Apparel Firms Nancy J. Hodges 1 & Albert N. Link 2
Received: 9 December 2016 / Accepted: 15 December 2016 / Published online: 27 December 2016 # Springer Science+Business Media New York 2016
Abstract According to the European Skills Council, the apparel industry is experiencing a renaissance in countries throughout the European Union, and this renaissance is marked by innovation and technical development among small firms. In this paper, the AEGIS database is used to estimate a growth model for the apparel industry. The annual rate of growth of European apparel firms is modeled and measured in terms of growth in number of employees since the firm was founded. The model is presented through descriptive statistical analyses on the relevant variables that were used to estimate this dimension of firm performance—founder characteristics including gender and education, as well as whether the firm is family owned. The model has implications for identifying factors important to apparel firm growth that could help in policy development designed to foster increased industry growth. Keywords Apparel industry . Entrepreneurship . Employment growth . Gender . Family governance JEL Classifications L26 . L67 . J12 . J16
Introduction During the past 25 years, the global apparel industry has changed dramatically. What was once a domestic industry in both the USA and Europe has now largely moved offshore to become a geographically complex and oftentimes fragmented value chain. As a low-tech, low-skilled industry, apparel firms began seeking out locations with low cost labor from its very beginnings, but for some, it was the end of the quota restrictions * Albert N. Link [email protected]
1
Department of Consumer Apparel, and Retail Studies, Bryan School of Business and Economics, University of North Carolina at Greensboro, Greensboro, NC, USA
2
Department of Economics, Bryan School of Business and Economics, University of North Carolina at Greensboro, Greensboro, NC 27412, USA
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J Knowl Econ (2017) 8:489–498
and trade agreements such as NAFTA that signaled the end of the domestic manufacturer (Gereffi 2000; Taplin 2006). Advanced economies, like those of the USA and European Union (EU), no longer have the degree of manufacturing that they once had (Hodges and Lentz 2010; Taplin and Winterton 2004). Jobs in apparel manufacturing witnessed a parallel decline throughout the end of the 20th and into the early twentyfirst century (Hodges and Karpova 2006). Recently, it has been suggested that the industry is returning to its domestic roots, albeit slowly. This resurgence is happening in the form of entrepreneurial small businesses seeking to manufacture apparel using local supply chain partners in the process. Known in the USA by the term reshoring, there is a growing trend among apparel firms looking to rebuild the domestic job economy and focusing on innovation as well as technical change as the means to achieve this goal. The same trend may also be happening in the European Union, where, according to
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