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

The study investigates the knowledge spill-over from TNCs to supplier-firms in the apparel industry in Bangladesh. 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 down stream upgradation. Using case study method on ten firms from both TNCs and supplier-firm’s side the study explores four fundamental factors such as national level infrastructure and institutional support, firm level infrastructure and resources (tangible), visionary leadership, and 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 directly affect the knowledge spill-over and upgradation of supplier firms from developing country.