The present study explores the implications of engagement in global commodity chains for the productive efficiency, industrial upgrading and exports of Egypt's textile and apparel (T&A) firms, particularly in view of Egypt’s long standing Cooperation/Association Agreements with the European Economic Community/European Union spanning the period 1977 to date. Using a balanced panel of 116 T&A firms in Egypt for the period 2001-2004, a production function is estimated yielding firm-level total factor productivity (TFP) estimates. Subsequently, TFP estimates are regressed on a set of variables representing engagement in global commodity chains and ensuing industrial upgrading. Egypt’s case is compared with that of Mexico, particularly in relation to the effect of the North American Free Trade Agreement's preferential treatment and rules of origin on textile and apparel firms' productivity and industrial upgrading.
Author(s): Iman El Ayouty