Determinants of the Bangladesh garment exports in the post-MFA environment

Abstract

The garment industry is considered as one of the driving forces of socio-economic development of Bangladesh due to its significant contribution to the country's exports, employment generation, and poverty alleviation. This study investigates the determinants of the Bangladesh garment exports in the post Multi-Fibre Arrangement (MFA) environment. Using data from World Bank Enterprise Surveys and other information from secondary sources, this study finds that labour cost, labour productivity, firm size, availability of domestic input materials, and firm location in a port city are the major determinants of Bangladesh garment exports. In addition, the analysis finds that cheap labour, firm size, product and market diversification, preferential market access, and proactive policies by the Bangladesh government have also helped the Bangladesh garment industry to become successful during the post-MFA period.