Export Diversification and Sectoral Competitiveness in Bangladesh after LDC Graduation: Evidence from Revealed Comparative Advantage

Abstract

This study provides a long-term picture of sectoral competitiveness of Bangladesh by analyzing export performance through Revealed Comparative Advantage (RCA) framework from the period of 2001 to 2023 at the HS-2 digit level. Although the ready-made garments (RMG) sector has historically dominated Bangladesh's export structure, the analysis identifies several non-RMG product categories specifically crustaceans, aluminum goods, oilseeds, metal containers, and ceramic products demonstrating either long-term or emerging comparative advantages. The study uses consistent 23-year longitudinal export data from the UN Comtrade database to show that these sectors have structural strengths based on geographic advantages, supportive government policies, gradual improvements in technology, and links to domestic industries. The study also highlights that some agricultural and industrial goods have unstable and declining RCA patterns. Thus the results implicate that after Bangladesh leaves the LDC, it should focus on industrial policy based on RCA, targeted trade finance, and encouraging FDI in certain sectors to help diversify its exports. Long-term RCA trends can also help in trade negotiations and boosting exports activities.