Upgradation of Bangladeshi Apparel firms in the Global Value Chain: Knowledge Spillover and Dynamic Capability Perspective

The study investigates the knowledge spill-over from the TNCs to supplier-firms in the apparel industry in Bangladesh. Study finds that dynamic capability of the entrepreneurs and the absorptive capacity of the employees enable firms to upgrade their position from CMT (cut-make-trim) to ODM (own-design-manufacturer) and OBM (own-brand-manufacturer) stage in the global value chain. This is a sign to make a move from static efficiency to dynamic efficiency that ensures downstream upgradation. Using case study method with ten firms from both TNCs and the supplier-firms, the study explores four fundamental factors such as a) national level infrastructure and institutional support, b) firm level infrastructure and resources (tangible), c) visionary leadership, and d) managerial & technical efficiency that lead such upgradation in the value chain process. The study further argues that close relationship between TNCs and supplier-firms and the visionary leadership of the supplier firm directly affect the knowledge spill-over and upgradation of supplier firms from developing country.