Competition, Co-operation and Subcontracting - Lessons from the Clothing Industry in Thailand.

A close examination of the organisation of the clothing industry in Thailand exhibits a rather paradoxical situation: although the structural features of the sector - the breaking down of the production process, high labour intensity, low asset specificity, low skilled labour - seem to legitimate a market co-ordination mechanism, it is a close, durable and multiform co-operation which cements, in Thailand, the relations between contractors and subcontractors, as well as between subcontractors themselves. We defend the idea that this kind of co-operative organisation of economic activities represents an appropriate answer to the flexibility required by ever changing markets. Co-operation is here understood as a mechanism of temporal co-ordination of economic activities which, far from substituting itself to the market co-ordination mechanism, rather completes it.