Information structure and behaviour of a textile industrial district

This article presents a model of the structure of the information flows tha t underlie the creation of production chains between thousands of small tex tile firms located in Prato, central Italy. Contrary to most textile indust ry of western Europe and north America, Prato did not die out once average salaries in the region rose towards the world's highest. The reason is that Prato was able to switch from a competitive advantage based on low prices to a competitive advantage based on the aesthetical features and variety of textiles. Analysis of the structure of production chains can explain the p erformance of this distributed production system throughout its evolution. The model reconstructs interactions of ten types of Pratese firms from 1946 to 1993 on a scale of 1:1.