Policy Series Effects on Bangladesh Readymade Garments Exportation

Abstract This paper examines the effects of industrial policies series taken since 2005 on the ready-made garments in Bangladesh, including formation of export processing zones, taxation facility, flat-rate duty drawback facility, FDI with equity participation and so on. Difference in Differences technique is employed and a panel dataset of industrial policy and export data of 75 companies from 1991 to 2020 are used to evaluate the quantitative effects. Empirical findings show that the industrial policies have had a significant positive impact on the RMG export, and that RMG exports increase on an average 10.68% after industry policy 2005 introduced. This paper contributes by providing empirical evidence for the industrial policies effect on Bangladesh exportation. JEL Classification numbers: L52, L53, F14. Keywords: Industrial Policy, RMG industry, MFA phase out, DID.