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

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Author Info

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

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.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/788/4/ARRIDE_Discussion_No.169_salimullah_yamagata_yunus.pdf
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 169.

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Date of creation: Oct 2008
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Publication status: Published in IDE Discussion Paper. No. 169. 2008.10
Handle: RePEc:jet:dpaper:dpaper169

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Related research

Keywords: Bangladesh; Knitwear; Poverty reduction; Productivity; Profitability; Stochastic frontier analysis; Apparel industry; Textile industry;

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Cited by:
  1. Md. Shakil Ahmed & M. Daud Ahmed, 2013. "Efficiency Variation of Manufacturing Firms: A Case Study of Seafood Processing Firms in Bangladesh," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 45-56, May.

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