The Relationship between Growth and Quota Restrictions Concerning the Textile and Clothing Industry: A Study on RMG Sector of Bangladesh

The textile and clothing industry plays a significant role in the economy of Bangladesh. At present, the export performance of the readymade garment sector is more than 80% of total exports and hence made about 12% of GDP in Bangladesh. Thus, the development of our country largely depends on this sector, and it is considered as the backbone of our country. As the quota system under the Multi-Fiber Agreement phase had a great impact on the development process of the readymade garment sector in Bangladesh, the aim of this study is to find out the relationship between quota restriction and the growth of the readymade garment sector. For this purpose, the research has covered a period of twenty-four years as sample size, where 12 years has been considered as pre-MFA periods and 12 years as post-MFA period. Though this study is quantitative in nature, Descriptive statistics and Multiple Regression Analysis Techniques have been used to find out the relationship between quota restriction and the growth performance of Bangladesh's textile and clothing industry throughout this study period. At this point, the Multiple Regression Analysis Technique has been used for testing the dependency of Bangladesh RMG export amount on the Annual GDP, Exchange Rate, Employment in Million Workers and No. of garment factories throughout these periods. This regression analysis technique was tested with SPSS software and results showed the most significant factors affecting the export of Bangladesh RMG sector during the Pre and Post MFA periods. The evidence also showed no statistically significant relationship between the quota restriction and the growth of the Readymade Garments sector in Bangladesh. Therefore, by considering the significance of this sector in our economy and for the long run sustainability in this competitive world the textile and clothing industry in Bangladesh must meet the challenges appearing throughout this period.