A rationale for public investment in rural roads is that households can better exploit agricultural and nonagricultural opportunities to employ labor and capital more efficiently. Significant ...knowledge gaps persist, however, as to how opportunities provided by roads actually filter back into household outcomes as well as distributional consequences. This study examines the impacts of two rural road-paving projects in Bangladesh using a new quasi-experimental household panel data set surveying project and control villages before and after program implementation. A household panel fixed-effects methodology controlling for initial area conditions is used to estimate the impact of paved roads on household and individual outcomes and account for potential bias in program placement at the village level. Rural road investments are found to reduce poverty significantly through higher agricultural production, lower input and transportation costs, and higher agricultural output prices at local village markets. Rural road development has also led to higher secondary schooling enrollment for boys and girls, as compared to primary school enrollment. We find that road investments have also benefited the poor, meaning the gains are significant for the poor and in some cases disproportionately higher than for the nonpoor.
This paper assesses the profitability and productivity of the knitwear industry in Bangladesh taking into account the sector's role in poverty reduction. Using firm‐level data collected in 2001, rate ...of return and total factor productivity were used to gauge the extent and determinants of the profitability of the industry. In addition, stochastic frontier analysis was used to assess variability in productivity. The estimation results indicate high profitability of the knitwear firms on average. In Bangladesh, the dynamic development of the industry has entailed great diversity in efficiency in comparison with the garment industries of other developing countries. Although there is a significant scale effect in profitability and productivity, no supporting evidence was found for the positive impact on competitiveness of industrial upgrading in terms of usage of expensive machinery, vertical integration, and industrial agglomeration.
Recent macro evidence reconfirm the earlier finding that Rural Non-farm Activity (RNA) is a dominant and growing component of the rural economy in Bangladesh. Rural manufacturing is the most ...important RNA both in terms of current size and growth performance. While the overall cottage industry sector experienced negative growth in value added during the ' 80s, there has been differential performance within the sector. Most of the dominant cottage industries stagnated; but growth has been quite pronounced in non-traditional industries involving larger employment size and higher capital intensity. These industries cater towards urban markets and higher income groups in rural areas, and are located mostly in semi-urban and urban areas. The structure of small industries has also changed in favour of non-traditional industries that are located more in the semi-urban and urban areas, and have larger employment size and higher capital intensity. Average labour productivity in a large part of RNA is still lower than the going agricultural wage rate. However, the productivity level has shown a rising trend over the past decade for a significant proportion of the activities. One also observes a strong positive link between productivity and growth of individual industries. This implies that the subsistence nature of the sector is on decline— a process that can be accelerated through right kind of policy support.
