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

Author

Listed:
  • 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.

Suggested Citation

  • Bakht, Zaid & Salimullah, Md. & Yamagata, Tatsufumi & Yunus, Mohammad, 2008. "Competitiveness of the knitwear industry in Bangladesh : a study of industrial development amid global competition," IDE Discussion Papers 169, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  • Handle: RePEc:jet:dpaper:dpaper169
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    Citations

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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.

    More about this item

    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;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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