Concentration and Diversification of Export Economy of Bangladesh: Comparison and Policy Implication with Other Asian Countries

Abstract

Bangladesh has achieved consistent economic growth last ten years. Its export is also growing but heavily depending on garment sector. This paper measures how much Bangladesh’s export concentration than other Asian countries China, Thailand and Vietnam. This paper uses n-Firm concentration to measure top 4 sector concentration, Herfindahl-Hirschman (HH) index to measure single industry domination and analyses current export for compare how much percentage contribution changes of major industries over the period. This paper finds Bangladesh’s export highly concentrated on single industry whereas other countries are more diversified on different sectors. Thailand and Vietnam have the same characteristics with Bangladesh in many aspects, but their export sectors diversified very nicely over the year. It explains major reasons for extreme concentration of Bangladesh’s export. This paper proposes a diversification framework for Bangladesh with identifying four major variables i.e Dynamic variables, Favourable variables, Structural Transformational Variables, and Policy and Commercial policy. It also suggests some factors with implementation guide under each variable with the experience of Thailand and Vietnam to implement the proposed framework.