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Centre for Trade and Economic Integration (CTEI)

International buyers, suppliers' performance and workers' outcomes in the garment sector in Bangladesh

Multinational corporation (MNC) buyers play key roles in global value chains (Antràs and Chor, 2021). The academic literature establishes that international buyers adopt varied procurement strategies: some adopt more “relational” strategies, in which they pay higher mark-ups to suppliers, while others adopt “spot” sourcing strategies, in which they pay lower mark-ups (Cajal Grossi et al, 2022).

Relational sourcing provides higher rents to suppliers, but to what extent workers employed by these suppliers benefit from buyers’ relational strategies is an open question. In this project, we make progress on this question by developing a research agenda on this topic in the context of Bangladesh’s participation in the global supply chain for apparel. Our first output explores buyer-level heterogeneity in COVID19 responses, their suppliers’ outcomes, and their suppliers’ workers’ outcomes.

 

 

Is Better Work better?: Evidence from the Garment Sector in Bangladesh∗