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Prepared by Matt Davies and Jonathan Dunn (both APD).
For a fuller discussion of the structure and characteristics of the garment industry and of its export performance through 2006 see IMF Country Report No. 07/230.
The substantially higher domestic value added for knitwear and the rapidly rising share of knitwear in total exports is raising Bangladesh’s retained export earnings from the garment sector as the cost of imported inputs is falling relative to the value of total garment exports.
The paper uses SITC (revision 3) data from the UN’s World Integrated Trade Statistics Database (WITS).
Export similarity indices show the extent of overlap of exports. They are defined as Σi MIN(Xi1Xi2) where X is the share of a commodity in exports, i is the four-digit export, and 1 and 2 are the two countries being compared.
The three measures used were: share in value terms of the top 10 and 20 products and the Hirschmann-Herfindahl index, which is defined as the square root of the sum of the squares of export share of each product—a higher value indicates greater concentration.
A new product is defined as a product that was not in the export mix in 1990, but appeared in exports at least once in the following years.