Analysis of the Structural Decomposition of the Textile-Clothing Industry in Bangladesh

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.