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Profitability And Diversity Among Knitwear‐Producing Firms In Bangladesh: The Prospects Of A Labor‐Intensive Industry In A Least Developed Country

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  • Zaid BAKHT
  • Tatsufumi YAMAGATA
  • Mohammad YUNUS

Abstract

This paper assesses the profitability and productivity of the knitwear industry in Bangladesh taking into account the sector's role in poverty reduction. Using firm‐level data collected in 2001, rate of return and total factor productivity were used to gauge the extent and determinants of the profitability of the industry. In addition, stochastic frontier analysis was used to assess variability in productivity. The estimation results indicate high profitability of the knitwear firms on average. In Bangladesh, the dynamic development of the industry has entailed great diversity in efficiency in comparison with the garment industries of other developing countries. Although 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, vertical integration, and industrial agglomeration.

Suggested Citation

  • Zaid BAKHT & Tatsufumi YAMAGATA & Mohammad YUNUS, 2009. "Profitability And Diversity Among Knitwear‐Producing Firms In Bangladesh: The Prospects Of A Labor‐Intensive Industry In A Least Developed Country," The Developing Economies, Institute of Developing Economies, vol. 47(3), pages 340-366, September.
    • Handle: RePEc:bla:deveco:v:47:y:2009:i:3:p:340-366
    DOI: 10.1111/j.1746-1049.2009.00089.x
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    References listed on IDEAS

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    2. Kenichi Kashiwagi & Erina Iwasaki, 2020. "Effect of agglomeration on technical efficiency of small and medium‐sized garment firms in Egypt," African Development Review, African Development Bank, vol. 32(1), pages 14-26, March.
    3. Kenichi Kashiwagi & Erina Iwasaki, 2024. "Industrial linkage, vertical integration and firm performance: evidence from textile and garment industry in Egypt," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(1), pages 803-828, February.

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