Abstract
Purpose: This paper aims to introduce the technology’s role and the final demand in the textile clothing industry’s growth path (TCI) of Bangladesh. Methodology: This study applies structural decomposition analysis in the input-output framework to measure Bangladesh’s textile–clothing industry structural changes. Structural decomposition analysis is also known as growth accounting in literature. Findings: This paper finds that, from 1975 to 1995, the TCI has grown due to huge domestic demand, from 1995 to 2015, this industry has grown due to export expansion. The technology was never a key factor over low–cost labor for the development of TCI in Bangladesh. Implications: For the sustainable development of the TCI in Bangladesh, domestic demand expansion is significant. Private and public policies should reflect this expansionary (domestic demand expansion) strategy. Originality: Previous studies on the TCI were mainly descriptive; there was no decomposition analysis in the input-output framework. Moreover, this paper decomposes the growth of the TCI into technical effect and final demand effect, which are new in the ready-made garment industry of Bangladesh.
Highlights
The export-oriented textile-clothing industry (TCI4) in Bangladesh started its journey in the late 1970s as a small non-traditional sector of export
(1) We develop the output for national input-output tables (IOTs) for country from the Multi-Regional Input-Output Tables (MRIOTs) using the equation (2) below, where is the intermediate output of country, is the final output of country, and is exported
The textile industry has started its growth in the early 1980s, a post-liberation war period in Bangladesh
Summary
The export-oriented textile-clothing industry (TCI4) in Bangladesh started its journey in the late 1970s as a small non-traditional sector of export. The industrial base which sustained such high growth enjoyed a robust expansion, from less than 50 factories in 1983 to more than 4,500 in 2019, with the number of TCI workers reaching approximately 4 million out of which 3.6 million is women. Bangladesh is a developing country, and its economy is mainly dependent on agriculture. The TCI has been placed the most considerable export earnings of Bangladesh. The textile industry, pharmaceuticals, agribusiness, jute, leather, tea, and food processing contribute to Bangladesh's national economic development. TCI has secured the first position to earn foreign currency (Rahman & Siddiqui, 2015)
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