Abstract
Bangladeshs export earning has significantly increased over a period of time. Readymade garments (RMG), jute, and leather are the top three export earning sectors. This paper uses a multiple linear regression model to explain the relationship between total exports, and the top three export earning sectors. This paper finds Bangladeshs export performance is highly dependent on the RMG sector while Bangladesh has a comparative advantage for many other sectors in the global market. On the other hand, Bangladeshs export market is also concentrated with few countries. Less diversification in products and markets is a great concern for the export economy of Bangladesh because competition in the global export market is always rising. In such a situation there is no other way to emphasize product diversification and explore new markets to reduce high dependency on a few big markets.
Highlights
Bangladesh‟s export earning has significantly increased over a period of time
Bangladesh‟s export market is concentrated with few countries
It recently occupied the second position in the export basket of Bangladesh by crossing its closest competitor leather sector but still, its growth rate and share are incomparable against the Readymade garments (RMG) sector
Summary
With the help of obtained values in the table (1), we can rewrite equation (1) as, InTE= 0.745+0.876lnRMGi+0.067lnJutei+0.036lnLeatheri (2). From equation (2) we see that a 1 percent increase in the RMG export led on the average to about a 0 .87 percent increase in the total export. Holding RMG and leather sector constant, a 1 percent increase in jute export led on the average to about a 0.067 percent increase in the total export. Holding the other two sectors constant, a percent increase in the leather sector led on the average to about 0.036 percent increase in the total export. The R2 value of 0.99 means that 99 percent of the variation in the (log of) total export is explained by the logs of RMG, jute, and leather export. Ready-made garments Whenever we talk about the economy, growth, and export income of Bangladesh, it leads us to talk about the performance of the RMG sector. Figure 1:- RMG Export, Total Export, and Percentage Share of RMG Sector
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