Versita

The impact of transport infrastructure on Readymade garment export in Bangladesh: A gravity model estimation

Mahmuda Akter khuky ,Siong Hook ,Lee Chin ,Mohd Yusof Bin Saari
Keywords: Transport infrastructure, Readymade garment export, Gravity model, Bangladesh. ,

Abstract

Transport infrastructure is considered the most important component for international trade by accessing the world market. This study aims to explore identifying the role of transport infrastructure performance in Readymade garment (RMG) bilateral export between Bangladesh and its trading partners. This study employed a gravity model under two different econometric specifications: Pooled OLS (POLS) and Poisson pseudo-maximum likelihood (PPML) estimator with time and country-specific effects. The current study considered different transportation moods such as rail, road, air, and sea. Results showed the standard gravity variables are highly significant with the expected signs. The novelty of this study is to provide an empirical analysis of the impact of different transportation moods on commodity trade, more precisely in the RMG industry. Finally, the result shows that logistics except for road the other three transportation moods such as rail, air, and sea are found a positive and significant correlation with RMG trade.