For some low-income countries exportation of labor-intensively manufactured
goods has been a hope for economic growth and poverty reduction. A good
example is the knitwear industry in Bangladesh. This is a study on such a
growing manufacturing industry with firm-level data collected by the authors in
2001. Conclusions are the followings. First, the knitwear industry in Bangladesh
contributes to poverty reduction by providing entry-level workers with a great
scale of employment opportunities and earnings higher than the national poverty
line. Second, the average profitability of the knitwear producing firms is very
high. Third, such a dynamic development of the industry entailed great diversity
in efficiency even in comparison with the garment industry of other developing
countries. Fourth, there is no evidence found supporting positive impacts on
competitiveness through industrial upgrading in terms of usage of expensive
machines and vertical integration and industrial agglomeration.