Four Decades in the global apparel value chain: Evidence from Bangladesh

Abstract

The remarkable growth of the Bangladesh apparel industry within the global apparel value chain is an interesting case because the industry grew from virtually zero export capacity to become the second largest apparel exporter in the world. The country attained its unprecedented success against the speculations made by some industry experts that it would lose its market share after the abolition of the Multi-Fibre Arrangement (MFA) with effect from 2005. This paper aims to delineate the role of national policies and world demand and abolition of MFA through an econometric analysis using data from 1976-2018. The findings suggest that, contrary to the gloomy predictions, ample availability of labour and the pragmatic domestic policy posture helped Bangladesh to consolidate its position in the global apparel value chain in competitive market conditions during the post-MFA era. The policy challenge for the country is to achieve structural adjustments and industrial upgrading within the value chain as the surplus labour pool gradually depletes. Show more