Enhancing small and medium-sized enterprises’ sustainability in global value chains: The impact of multinational corporations on Bangladesh’s garment industry

Abstract

This paper presents a detailed investigation into the influence of multinational corporations (MNCs) on the sustainability practices of small and medium-sized enterprises (SMEs) operating within Bangladesh’s garment industry, an integral part of global value chains (GVCs). Drawing on empirical data from 65 SMEs in Bangladesh and complemented by secondary data from the Asian Development Bank (ADB), the study employs advanced regression and correlation analyses to unravel the dual-edged effect of the MNC-SME relationship. The findings reveal that while MNC support positively affects SMEs’ sustainability initiatives, the stringent sustainability requirements exacerbate operational inefficiencies, creating a paradox where sustainability initiatives contribute to both growth and constraint. The research concludes that for MNC-driven sustainability efforts to be truly effective, a more balanced and collaborative approach is necessary, one that addresses the unique resource constraints faced by SMEs in emerging markets. This study offers valuable insights into the evolving discourse on sustainability within GVCs, highlighting the strategic role of MNCs and their influence on the sustainability and competitiveness of SMEs in developing economies.