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Exports and Inequality: Evidence from the Highly Concentrated Textile and Garment Sector of Bangladesh

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  • Md. Iqbal Bhuyan
  • Keun-Yeob Oh

Abstract

In this study, we investigate the effects of textile and garment (T&G) exports on income inequality in Bangladesh. Focusing on T&G exports alone, which contribute more than 90% of the country’s total exports, we hypothesize that the export sector of a country being concentrated on a single industry widens income inequality. Based on time series data over the period 1991–2015, the autoregressive distributed lag (ARDL) bounds testing approach to cointegration indicates that there is a long-run relationship between the variables. It seems that exports from the T&G sector have a statistically significant effect on income inequality in the long run, such that the high concentration of T&G exports contributes to widening income inequality in Bangladesh. This result implies that policies oriented toward export diversification are necessary so that people working in other sectors can also engage in income generating activities from exports. Our results also demonstrate that income inequality rises in the initial stages of economic growth. Then, after reaching a threshold level of growth, income inequality falls. This result confirms the validity of the Kuznets hypothesis in the case of Bangladesh.

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  • Md. Iqbal Bhuyan & Keun-Yeob Oh, 2021. "Exports and Inequality: Evidence from the Highly Concentrated Textile and Garment Sector of Bangladesh," Journal of South Asian Development, , vol. 16(2), pages 293-309, August.
    • Handle: RePEc:sae:soudev:v:16:y:2021:i:2:p:293-309
    DOI: 10.1177/09731741211024870
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    2. Ishtehar Sharif Swazan & Debanjan Das, 2022. "Bangladesh's Emergence as a Ready-Made Garment Export Leader: An Examination of the Competitive Advantages of the Garment Industry," International Journal of Global Business and Competitiveness, Springer, vol. 17(2), pages 162-174, December.
    3. Md Iqbal Bhuyan & Keunyeob Oh, 2024. "Trade Destruction and Trade Diversion of Indian Anti-dumping Duties Against Bangladesh," Journal of South Asian Development, , vol. 19(1), pages 138-151, April.
    4. Fuzhong Chen & Shakil Ahmad & Guohai Jiang & Jinwei Chen, 2023. "Factors Affecting Textiles Products Exports of Major Producers: A Gravity Model Approach," SAGE Open, , vol. 13(4), pages 21582440231, December.

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