Tengstam, Sven2008-02-212008-02-212008-02-211403-2465http://hdl.handle.net/2077/9580The clothing sector has been a driver of diversification and growth for countries that have graduated into middle income. Using a partial adjustment panel data model, this study tries to explain the international location of clothing production based on a combination of variables suggested by the Heckscher-Ohlin theory and by New Economic Geography theory. Our Blundell-Bond system estimator results show that closeness to intermediates such as low-cost labor and textile production has a positive effect on clothing production. Factor endowment and closeness to the world market have inversed U-shaped effects. This is expected, because above a certain level several other sectors benefit even more from closeness and factor endowments, driving resources away from the clothing industry.engClothing IndustryNew Economic GeographyComparative AdvantagesIndustrial AgglomerationJEL: F12; F13; L13; L67; R12; R3Text