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Global value chain: An empirical investigation of Bangladesh’s garments and textile industry

Author

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  • Sumon Hossain

    (Kyungdong University, Department of Business Administration, 46, Bongpo 4-Gil, Toseong-Myeon, Goseong-Gun, Gangwon-do, Korea)

  • Jaap Van Baars

    (Kyungdong University, Department of Business Administration, 46, Bongpo 4-Gil, Toseong-Myeon, Goseong-Gun, Gangwon-do, Korea)

Abstract

Bangladesh is the second-largest garments and textile exporting country in the world and has more than 80 percent of its total export earnings from this sector. Despite it playing a significant role in policymaking in developing countries like Bangladesh, there is a gap in study regarding the effect of participation and position of garments and textile industry in the global value chain (GVC). This paper empirically analyses the participation and position of Bangladesh’s garments and textile industry in the context of the GVC by using the multiregional Input-Output table EORA Global MIRO. We found that this country has a comparative edge in terms of low-cost production and specialization and makes a significant contribution to the global garments industry, but it has not been able to fully integrate into the global production network. We also found that Bangladesh's garments and textile industry have higher backward participation than forwarding participation and occupy a downstream position in GVC. However, the downstream phases contribute to a large percentage of this country's trade. The findings of the study suggest that enhancing the GVC participation of Bangladesh’s garments and textile industry may have a substantial positive impact on the local industry. To boost the capability, there must be local requirements, such as adequate backward linkage for the manufacturing process, research and development for innovation, fewer regulatory restrictions, a mature money market in international operation, and a favorable environment for foreign investors. Key Words:Bangladesh, Ready Made Garments (RMG), Trade Openness

Suggested Citation

  • Sumon Hossain & Jaap Van Baars, 2022. "Global value chain: An empirical investigation of Bangladesh’s garments and textile industry," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(3), pages 51-60, April.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:3:p:51-60
    DOI: 10.20525/ijrbs.v11i3.1726
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    References listed on IDEAS

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    1. Alessandro Borin & Michele Mancini, 2015. "Follow the value added: bilateral gross export accounting," Temi di discussione (Economic working papers) 1026, Bank of Italy, Economic Research and International Relations Area.
    2. Bart Los & Marcel P. Timmer & Gaaitzen J. Vries, 2015. "How Global Are Global Value Chains? A New Approach To Measure International Fragmentation," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 66-92, January.
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