Hostname: page-component-78c5997874-ndw9j Total loading time: 0 Render date: 2024-11-16T11:23:29.531Z Has data issue: false hasContentIssue false
  • English
  • Français

Impacts of Chinese imports and coping strategies of local producers: the case of small-scale footwear enterprises in Ethiopia

Published online by Cambridge University Press:  12 November 2007

Tegegne Gebre-Egziabher
Tegegne Gebre-Egziabher*
Affiliation:
Regional and Local Development Studies, Addis Ababa University, POB 1176, Addis Ababa, Ethiopia
*
Email: tegegneg@yahoo.com
Get access Rights & Permissions [Opens in a new window]

Abstract

The footwear sector in Ethiopia is dominated by cheap imports from Asia, particularly from China. This has inflicted heavy impacts on the sector, and threatened its competitiveness in the domestic market. This study examines the impact of imports and coping strategies of firms to withstand the competition. Firm level data were gathered from micro, small and medium footwear enterprises. The findings revealed that Chinese shoes are superior in design, price and quality, with the result that they have taken over the domestic market. The impact of Chinese imports on local producers varied from downsizing, bankruptcy, loss of assets and property, to downgrading activities and informalising operations. Firms have pursued coping strategies that focused on improving design and quality, as well as lowering prices and profit margins. Coping strategies appear to be differentiated by size of firms, and have some association with the performance of firms. The ways forward for local producers should focus on collaborative engagements of stakeholders and government to overcome the competitive disadvantages of firms. Training, technology, quality control, benchmarking and reorganization of production should be designed as a package of intervention. In addition, strengthening local producers to engage in collective actions and promoting exports should also be given proper attention.

Type
Research Article
Information
The Journal of Modern African Studies , Volume 45 , Issue 4 , December 2007 , pp. 647 - 679
Copyright
Copyright © Cambridge University Press 2007

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Berhanu, Nega & Moges, Kibre. 2002. ‘Declining productivity and competitiveness in the Ethiopian leather sector’, unpublished paper.Google Scholar
Central Statistical Agency (CSA). 2003. Report on Small Scale Manufacturing Industries Survey. Addis Ababa: CSA.Google Scholar
Ethiopian Economic Association (EEA). 2003/04. Report on the Ethiopian Economy: industrialization and industrial policy in Ethiopia. Addis Ababa: EEA.Google Scholar
Food & Agriculture Organisation (FAO). 1998. FAO/WFP Crop and Food Supply Assessment Mission to Ethiopia. http://www.fao.org/docrep/004/x0770e/x0770e00.htmGoogle Scholar
Jenkins, R. 1997. ‘Trade liberalization in Latin America: the Bolivian case’, Bulletin of Latin American Research 16, 3: 307–25.Google Scholar
Kaplinski, R., McCormick, D. & Morris, M.. 2006. ‘The impact of China on sub-Saharan Africa’, paper for UK Department for International Development.Google Scholar
Knorringa, P. & Pegler, L.. 2004. Operationalizing Social Capital for Industrial Development in Marginalized Countries: field studies on the footwear sub-sector in Ethiopia and Vietnam. The Hague: Institute of Social Studies.Google Scholar
Ministry of Trade and Industry (MTI). 2003. ‘Ethiopia Trade and Transformation Challenges: diagnostic trade and integration study, Annex 1’, Addis Ababa: MTI, unpublished.Google Scholar
MTI. 1997. Micro and Small Enterprises Development Strategy. Addis Ababa: MTI.Google Scholar
Mulat, Demeke, Getu, Fantu & Fereda, Taddelle. 2005. ‘Towards a more employment and pro-poor economic growth in Ethiopia: issues and policies’, unpublished consultancy report for ILO.Google Scholar
Rabellotti, R. 1999. ‘Recovery of a Mexican cluster: devaluation bonanza or collective efficiency?’, World Development 27, 9: 1571–85.CrossRefGoogle Scholar
Roberts, S. & Thoburn, J.. 2003. ‘Adjusting to trade liberalization: the case of firms in the South African Textile Sector’, Journal of African Economies 12, 1: 67–96.CrossRefGoogle Scholar
Rodrik, D. 1993. ‘Trade and industrial policy reform in developing countries: a review of recent theory and evidence’, Cambridge, MA: National Bureau of Economic Research, working paper no. 4417. http://www.nber.org/papers/w4417.pdfCrossRefGoogle Scholar
Schmitz, H. 1999. ‘Global competition and local cooperation: success and failure in the Sinos Valley, Brazil’, World Development 27, 9: 1627–50.CrossRefGoogle Scholar
Taye, Mengiste. 2001. ‘Indigenous ethnicity and entrepreneurial success in Africa: some evidence from Ethiopia’, Washington, DC: World Bank policy research working paper.Google Scholar
van der Loop, T. 2004. ‘Clothing and footwear in African industrialization: the case of Ethiopia’, in McCormick, D. & Rogerson, C. eds., Clothing and Footwear in African Industrialization. Pretoria: African Institute of South Africa.Google Scholar
UNIDO & Ministry of Trade and Industry (MTI). 2005. ‘The leather master plan study’, Addis Ababa, unpublished.Google Scholar
Wolday, Amha. 2003. Micro finance in Ethiopia: performance, challenges and role in poverty reduction. Addis Ababa: Association of Ethiopian Microfinance Institutions, occasional paper no. 7.Google Scholar
Fu-Lai, Yu T.. 2001. ‘Toward a capabilities perspective of the small firm’, International Journal of Management Reviews 3, 3: 185–97.Google Scholar