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Role of Bangladesh Small and Cottage Industries Corporation in Poverty Reduction

Author

Listed:
  • Mohammed Ziaul Haider
  • Champa Bati Dutta
  • Ohidul Islam Siddiqui

Abstract

This study investigates the role of Bangladesh Small and Cottage Industries Corporation (BSCIC) in poverty reduction of Bangladesh. A total of 91 workers are surveyed who work in BSCIC estates and non-BSCIC manufacturing firms in the south-west region of Bangladesh. This study has used both panel and cross-section approaches. The study findings indicate that BSCIC has a significant role in industrial expansion and poverty reduction in Bangladesh. The regression results reveal that BSCIC significantly influences household consumption and poverty reduction. A 1 per cent increase in income from BSCIC will increase the yearly household consumption by 0.73 per cent, whereas it is only 0.36 per cent in case of non-BSCIC income. The impact of income increase on consumption is more than double for the BSCIC group households in comparison with non-BSCIC group households. In cross-section analysis, the purchasing power parity (PPP) at local currency of US$ 1.25 is considered in this study to construct poverty line. The result shows that, for an increase in the income from BSCIC by US$ 1 per month, income over poverty line increases (or the poverty gap decreases) by US$ 0.028 per month per household on average. Therefore, this study suggests for planned expansion of BSCIC for poverty reduction in Bangladesh.

Suggested Citation

  • Mohammed Ziaul Haider & Champa Bati Dutta & Ohidul Islam Siddiqui, 2015. "Role of Bangladesh Small and Cottage Industries Corporation in Poverty Reduction," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(1), pages 103-121, March.
    • Handle: RePEc:sae:soueco:v:16:y:2015:i:1:p:103-121
    DOI: 10.1177/0972063415575130
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    References listed on IDEAS

    as
    1. International Monetary Fund, 2005. "Bangladesh: Poverty Reduction Strategy Paper," IMF Staff Country Reports 2005/410, International Monetary Fund.
    2. Christopher Garroway & Juan Ramón de Laiglesia, 2012. "On the Relevance of Relative Poverty for Developing Countries," OECD Development Centre Working Papers 314, OECD Publishing.
    3. World Bank, 2011. "World Development Report 2011 [Rapport sur le développement dans le monde 2011 : Conflits, sécurité et développement - Abrégé]," World Bank Publications - Books, The World Bank Group, number 4389, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Poverty reduction; household consumption; manufacturing firm; BSCIC; south-west region of Bangladesh;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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