Upgrading, changing competitive pressures and diverse practices in the East and Central European apparel industry

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After a period in the 1990s of rapid integration into the production and trade networks of the European Union (EU) (and to a lesser extent of the United States), clothing manufacturers in East and Central Europe have had to adjust quickly to the changing costs of production with EU accession, the rise of Chinese exports, and the 1 January 2005 final phaseout of quantitative quotas into major markets. In this paper we focus on the changing competitive pressures on clothing producers in the region and on the diversity of adjustments currently being made in response to these changes. In particular, we detail the wide range of adjustment strategies being adopted by firms in Slovakia and Bulgaria, and show how interregional price competition, downgrading, and geographical shifts in patterns of sourcing and production are articulated with imperatives to regionalized production for major markets, stabilization of supply networks, industrial upgrading, and the expansion of localized sourcing and domestic-marketing strategies.