geography MCQ #10537

A trade economist examines Pakistan's export basket and finds it dominated by low-value textile and apparel products with minimal movement into higher-value electronics or machinery. Which economic geography concept best explains why this structural trap persists?

geography MCQ #10537

  1. Question 1

    Q1. A trade economist examines Pakistan's export basket and finds it dominated by low-value textile and apparel products with minimal movement into higher-value electronics or machinery. Which economic geography concept best explains why this structural trap persists?

    • A) Path dependency and industrial lock-in, where existing textile cluster infrastructure, labour skills, and institutional support create high switching costs that prevent capital and labour from relocating to new sectors even when returns are higher elsewhere
    • B) The Heckscher-Ohlin theorem, which predicts that labour-abundant countries will always specialise exclusively in textiles regardless of government industrial policy
    • C) Geographical determinism, since Pakistan's landlocked northern provinces lack access to the ports needed for electronics export logistics
    • D) The infant industry paradox, where textile firms that reached maturity now face zero tariffs globally and therefore have no incentive to move up the value chain

    Answer: Path dependency and industrial lock-in, where existing textile cluster infrastructure, labour skills, and institutional support create high switching costs that prevent capital and labour from relocating to new sectors even when returns are higher elsewhere

    Explanation: Path dependency and industrial lock-in explain why Pakistan's textile sector persists: existing factory infrastructure, specialised labour pools, supplier networks, and government incentive structures all create high barriers to redirecting capital and skills into new export industries.