Abstract:
A fascinating example of the fluctuating fortunes of Pakistani exports is that of the footballs produced by a cluster of manufacturers in Sialkot. A sector which was dominated by Pakistani firms is now under heavy threat from cheaper balls produced in East Asia (particularly China). Looking at the sector, it is striking to see that the technology used by the majority of the firms has not progressed over the last 30 years and this raises the question of whether Pakistan is falling significantly behind the technology frontier. Using data from a sample of firms we map the football production process and focus on different cutting technologies to compare the productivities across firms and measure the benefits of technology upgradation across different sized firm. Our results show that technology upgradation comes at a cost but is worthwhile for firms that need to produce a high volume of balls. But the falling demand for Pakistani balls may not justify technology upgradation for most of small and medium sized firms in the sector (which make up the vast majority of firms in the cluster).
