Sustaining competitive advantage of the Chinese clothing industry
: a resource-based view

  • Dongmei Cao

    Student thesis: Doctoral ThesisDoctor of Philosophy


    China has established strong competitive advantage in the global apparel industry, accounting for almost 40% of world clothing exports in 2012. However, this position has been largely established through an export-oriented approach in the low labour-cost manufacturing segment of the industry. For Chinese clothing firms, sustaining this competitive advantage has been increasingly challenged within the context of global market depression and rising domestic production costs since 2008. Against this background, this research explores and tests sources of Sustained Competitive Advantage (SCA) of the Chinese clothing industry using a uniquely synthesised theoretical framework underpinned by global value chain theory and the Resource-Based View (RBV) of the firm. The hypothesized resources-SCA relationships are tested by using Structural Equation Modelling and with data collected from over 200 Chinese clothing companies. The results are largely consistent with RBV theory: constructs of Fundamental Resource and Upgrading Capability are shown to be significantly related to sustained competitive advantage whilst, interestingly Dynamic Capability is not. At the same time, all three resource constructs are significantly correlated to each other, confirming the importance of resource bundling effects on SCA. Based on the data analysis, strategic recommendations are provided for SCA of the Chinese clothing industry offering solutions to the challenges of rising costs, price-based competition and the lack of strong brands. Cost-control strategies are highlighted as key to retaining competitive advantage in the manufacturing segment of the industry, whilst upgrading strategies are the critical driver in sustaining competitive advantage of the entire industry as it seeks to compete on quality and brand rather than price. The research extends knowledge in the discipline in four key ways: firstly, the synthesised research framework originally designed for this study; secondly, the holistic research model testing RBV logic which is also originally formulated for this study; thirdly, measurement and operationalisation of the relevant concepts which are also originally developed for this study; and fourthly empirical test of RBV and the resource bundling effect.
    Date of Award2014
    Original languageEnglish
    Awarding Institution
    • Coventry University
    SupervisorNigel Berkeley (Supervisor), Donald Finlay (Supervisor), Shengxiao Li (Supervisor) & Husni Kharouf (Supervisor)

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