Textile and Garment I ndu stry of Ethi opia: Governance, Upgrad in g and Participation in the Global Value C hains

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Addis Ababa University


This study analyzes textile and garment sub-sectors of Eth iopia within the g lobal value c hain s framework using both pi' imary and sccondary data. Primary data were collected through face-to - face firm level survey. GVCs r,'amework include s the analysi s of gove rnance, upgrading and participation level in the value chai n. In the GVCs literature, there are five types of governance namel y Market, Mo dular, Relatio nal , Captive, and Hierarch y. There are also fo ur upgrading types in GVCs: product, process, functional and chain upgrading. T he participation level in the GVC is the backward and forward integrat ion in terms of the foreign and domestic value added content in the g ross expo rt. Regard ing th e governance structure, this study found that Ethiop ian textile and garment sub -sector is unde r capt ive g lobal va lue chai ns governance structure. Under thi s type of governa nce structur e, the s ub-se ctor ha s a potential for product and process upgrading . T he captive GVCs governa nce str ucture limits the sub-secto r potential for functional up grad in g. However there is a variation in the share of gross export co ntents at industry level; the garment industry showed low domcstic value ac'ded and textile industries have high domestic va lu e added , the sub-sector in gencra l has more domestic va lue added share in the gross export content. The sub-sector is hi g hl y link ed with USA and EU market in term s of forward inteeration an d it ha s intense link with As ian ma rk ets in backward integration. Keywords : GVes, Governance, Upgrad in g, Participation



GVes, Governance, Upgrad in g, Participation