Readymade Garments (RMG) Sector and Its Contribution to Bangladesh's Export Earnings: An Empirical Study

The Ready-Made Garments (RMG) sector is the main engine of Bangladesh’s export-led growth. It contributes more than 80% of total export earnings and creates large-scale employment, especially for women. This study examines how RMG exports affect Bangladesh’s total export earnings during FY1990–91 to FY2024–25. The key objectives are to measure the extent to which RMG exports drive total export growth, analyze the trend and persistence of RMG’s share in exports, test the long-run relationship between RMG and total exports, and evaluate the stability of this relationship over time. The study employs a quantitative research design using secondary time-series data sourced from the Export Promotion Bureau, Bangladesh Bank, Bangladesh Bureau of Statistics (BBS), and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The analytical framework integrates descriptive trend analysis, a log-linear regression model, and econometric techniques including the Augmented Dickey-Fuller (ADF) test, Autoregressive Distributed Lag (ARDL) model, Error Correction Model (ECM), and stability diagnostics. Empirical results show that the long-run ARDL coefficient (0.956, p < 0.01) and the short-run coefficient (0.947, p < 0.01) confirm a strong, positive, and statistically significant relationship between RMG exports and total export earnings. The ARDL bounds test (F = 8.401) and the error correction term (−0.436, p < 0.01) indicate a stable long-run cointegrating relationship, while the ECM results show that 43.6% of any short-term disequilibrium is corrected each year. Correlation analysis (r = 0.982) further supports a strong link between RMG and total exports, and stability tests confirm that this relationship is consistent over time. The study concludes that Bangladesh’s export performance depends heavily on RMG. To ensure sustainable growth, export diversification and improvement in RMG competitiveness are essential.