Export Competitiveness of the Bangladeshi Ready-Made Garments (RMG) in the International Markets: The RCA Index Analysis with Porter’s Diamond Model

Md. Jahedul Islam

The external sector stability of Bangladesh is mainly sustained by its export growth, which predominantly depends on the Ready-Made Garments (RMG) sector. The main concern of this study is to address the competitive advantages of Bangladesh’s RMG sector in the international arena based on data from 2015 to 2020. Two approaches, entitled Porter’s diamond model and the Revealed Comparative Advantage (RCA) index, have been experimented to evaluate the competitiveness of Bangladesh RMG. By applying Porter’s diamond model, this study found that the low-cost human resources, capital resources, and the role of various factors of government contributed mostly towards Bangladesh RMG’s competitiveness in global markets, though the other factors such as infrastructure, knowledge resource, native competition were contributed less. In addition, the value of RCA index ranged from 30.29 to 34.45, suggesting that Bangladesh RMG has a robust competitive advantage in the international markets. This high index will help to maintain the healthy trade balance in Bangladesh. Governments continued policies need to be more strengthened to keep the RCA range up in the future.

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