Industry Dynamics in the Swedish Textile and Wearing Apparel Sector

This paper analyses the adjustment process within the Swedish textile and wearing apparel sector and finds results that support the notion of Schumpeter’s ‘creative’ destruction. The turnover of plants and jobs seems to ‘improve’ the industries from within due to an exit (entry) of less (more) productive plants, exit (entry) of old (new) incumbents, a destruction (creation) of less (more) human-capital intensive jobs, and a supply of new products on the world market. The econometric analysis of the probability of exit with plant, firm and industry characteristics supports the idea of a rationalisation from within.