Competitiveness of the knitwear industry in Bangladesh: a study of industrial development amid global competition

Zaid Bakht, Salimullah Md., Tatsufumi Yamagata and Mohammad Yunus

No 169, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper assesses the technical efficiency and profitability of the knitwear industry in Bangladesh taking into account the sector’s role in poverty reduction. While stochastic frontier analysis was invoked to assess technical efficiency, three alternative measures, namely the rate of return, total factor productivity and the Solow residual, were used to gauge the extent and determinants of the profitability of the industry based on firm-level data collected in 2001. The estimation results indicate the high profitability of the knitwear firms. In Bangladesh, the dynamic development of the industry has entailed great diversity in efficiency in comparison with the garment industries of other developing countries. While there is a significant scale effect in profitability and productivity, no supporting evidence was found for the positive impact on competitiveness of industrial upgrading in terms of usage of expensive machinery and vertical integration and industrial agglomeration.

Keywords: Bangladesh; Knitwear; Poverty reduction; Productivity; Profitability; Stochastic frontier analysis; Apparel industry; Textile industry; バングラデシュ; ニットウェア; 貧困削減; 生産性; 収益性; 確率フロンティア分析; 繊維工業; アパレル産業 (search for similar items in EconPapers)
JEL-codes: D24 J31 L67 O14 O53 (search for similar items in EconPapers)
Date: 2008-10-01
New Economics Papers: this item is included in nep-cse, nep-cwa, nep-dev and nep-eff
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Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 169. 2008-10-01

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