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Does Human and Social Capital Enhance Entrepreneurship? A Case Study of the Garment Industry in Bangladesh

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Abstract

Achieving an export value of about US$20 billion per year, Bangladesh is the world’s fourth-largest garment producer, behind only China; the European Union; and Hong Kong, and has a share of more than 5% in the global supply. Considering entrepreneurship as a fundamental source of success of the Ready-Made-Garment (RMG) industry, the paper looks into two aspects of entrepreneurship - capital accumulation and employment generation - in relation with entrepreneurial human and social capital. The analysis applies primary data from a self-conducted questionnaire survey of garment firm owners and several interview surveys in the capital city, Dhaka. The study reveals that the managerial ability of entrepreneurs with graduate education (in expanding employment/firm size) is impeded by the financial constraint, and that specific industry-specify technical experience prior to the start-up contributes to successful entrepreneurship in terms of capital accumulation. Enabling business conditions, such as appropriate access to formal finance, would help entrepreneurs with high level of human capital capitalize on their educational ability to enhance their entrepreneurship. The findings pertain to the importance of human resource development and entrepreneurship promotion in economic development in the country.

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Acknowledgement

The earlier draft of this paper was presented at the 13th International Conference of the Japan Economic Policy Association, Meiji University, November, 2014. The authors are grateful to the constructive comments offered by the session chair, commentator and participants at the Conference. They are grateful to two anonymous referees for insightful and constructive comments. They also gratefully acknowledge the financial support of the Japan Society for the Promotion of Science under its Grand-in-Aid for scientific Research C24530299 and C25380301.

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Authors and Affiliations

  1. Kyoto University, Yoshida-Honmachi, Sakyo-ku, Kyoto, 606-8501, Japan

    Souksavanh Vixathep

  2. Kobe University, 2-1 Rokkodai-cho, Nada-ku, Kobe, 657-8501, Japan

    Nobuaki Matsunaga

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  1. Souksavanh Vixathep
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  2. Nobuaki Matsunaga
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Correspondence to Souksavanh Vixathep.

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Vixathep, S., Matsunaga, N. Does Human and Social Capital Enhance Entrepreneurship? A Case Study of the Garment Industry in Bangladesh. IJEPS 10, 28–50 (2015). https://doi.org/10.1007/BF03405761

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