Title: Racing to the bottom, or climbing to the top? Local responses to the internationalisation of trade in the Brazilian textile and garments industry

Authors: Robson Sø Rocha

Addresses: Department of Management, Aarhus University, Fuglesangs Allé 4-2628, 3068210 Aarhus V, Denmark

Abstract: This article explores how firms in the textile and garment industry in Brazil are responding to trade liberalisation and the entry of multinational retailers into the Brazilian market. We analyse the competitive responses of local garment firms and, relatedly, how these responses are impacting on the industry's use of water. We show that the effects of trade liberalisation on the strategies of local firms and the use of natural resources are dependent upon the prior capacity of local actors to mobilise financial and human resources. In our case, contrary to the 'pollution havens' hypothesis, there is no indication that the regulatory framework has been downgraded to attract multinational companies (MNCs) or to help local firms cope with international competition. We claim that races to both the top and bottom are taking place as responses to the new competitive conditions.

Keywords: trade liberalisation; sustainability; textiles industry; garment industry; Brazil; institutional complementarities; local responses; internationalisation of trade; racing to the bottom; multinational companies.

DOI: 10.1504/IJBE.2017.087961

International Journal of Business Environment, 2017 Vol.9 No.3, pp.225 - 246

Received: 17 Nov 2016
Accepted: 29 May 2017

Published online: 13 Nov 2017 *

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