1 / 14

When do Firms Downsize?

This study examines the historical record and risk factors associated with downsizing in the textile industry in the US, including labor-saving technology, price scissors, offshore production, and firm-level factors. The findings have important policy implications for managing highly specialized plants and mitigating closure risks for rural, less educated workforces.

refugiob
Télécharger la présentation

When do Firms Downsize?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. When do Firms Downsize? Patrick Conway Department of Economics UNC-Chapel Hill

  2. Outline • The Historical Record on Downsizing in Textiles in the US. • Risk Factors • National • County-level • Firm-level • Policy Implications

  3. The Historical Record • Labor-saving technology • Creative destruction • The severed link between consumption and production

  4. Risk Factors at the National Level • Labor-saving technology • Price Scissors • Apparel Production Moving Offshore • Over-leveraging: the perfect sink • The giant stop sign

  5. County-level Risk Factors • Low per capita income on average in county • Low percent of county population having completed high school • More rural county

  6. Firm-level Risk Factors • Less flexibility in materials used • Fewer number of activities performed • In sum: Greater specialization hasn’t paid off historically in terms of longevity

  7. Policy Implications • Watch out for the highly specialized plants. • Rural, less educated workforces are at greater risk of closure – even when other factors are controlled for. • Caveat: much depends on the firm’s individual management. Work with the owner; don’t try to tell her what to do.

  8. Question: Will the Days of Large-Employment Textile Plants Return? Answer: Not likely, but a successful industry should remain.

More Related